TD Bank’s tech strategy for becoming a bank of the future

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It is common for Canadian developers to flock south to Silicon Valley, thinking it’s the only place to find good jobs. Jeff Henderson, the chief information officer at TD Bank, wants to reverse the trend.

The Toronto-based bank joined an effort sponsored by the Canadian innovation center Communitech to bring some of the wayward flock home. The Canadians recently held an event called Go North in Silicon Valley. TD was the only bank to participate.

Bankers did not hand out down parkas and wool hats, as I immediately pictured in my head.

“They didn’t go to Silicon Valley because they don’t like the weather in Canada; they went to Silicon Valley because they thought they couldn’t find the right employers up here,” Henderson said. “Our message down there is no, there are employers up here like TD Bank. You can come and work at TD and make a difference. We’re being very aggressive in acquiring that talent and leveraging those skills.”

TD Bank aims to hire 1,000 technologists this year, including data scientists and artificial intelligence experts. It plans to recruit 65% of this fresh blood from places other than a bank, such as Silicon Valley and college campuses.

The effort is part of an overall goal Henderson has set to make sure TD has all the technology capabilities it needs to be a “bank of the future.”

What is a bank of the future?

To Henderson, it’s one that’s set up to compete in a changing climate.

“What does a bank require out of its IT group to survive in the future? First and foremost, it needs agility, it needs speed to help our businesses adapt to the ever-changing environment, and it needs efficiency,” Henderson said.

The future looks cloudy
One technology that Henderson believes will help the bank meet these seemingly contradictory objectives is cloud computing.

A big plus for the cloud, in his mind, is its consumption-based model, saving the bank from buying hardware and software with unused capacity during down times.

Cloud computing also provides a standard infrastructure that should help the bank more easily deploy automation and DevOps techniques, Henderson said.

The bank’s “cloud journey” started two and a half years ago, when Henderson’s team built an internal private cloud in its data center.

“Primarily because we wanted to get more experienced on the cloud, we’re very much following a crawl, walk, run approach,” he said.

The next step is using software-as-a-service applications such as Salesforce, nCino’s Salesforce-based commercial origination software (which the bank is rolling out in the U.S.), and most recently, Office 365, Microsoft’s cloud-delivered version of Office.

Compared to hosting Microsoft email in its data center, Office 365 is cheaper and updates are pushed out automatically, Henderson said.

He also pointed out that while email is “absolutely critical” to TD Bank’s business, it’s not a differentiator.

“It’s not something I feel I have to run and manage as a competitive advantage for my business,” Henderson said. “It fits squarely into an area where I want to standardize as much as possible.”

Office 365 will help people share documents and help the bank adopt agile development methods, he said.

“It’s much easier for people to work in an agile fashion if we give them mobile capabilities to work that way,” Henderson said.

Employees have said in surveys that they want more mobility, to be unchained from their desks. Office 365, with its ability to work on a range of devices, should help that happen.
To further collaboration, the bank is redesigning its workspaces to be more open concept with less assigned seating, more team rooms and fewer individual workstations.

Henderson said he’s looking at Microsoft’s Teams collaboration software, but hasn’t made a final decision about it yet. The bank is planning to roll out enterprise chat and enterprise video from Microsoft, too.

Henderson hopes the outcome of all these efforts will be a “legendary employee experience,” he said.

Some bankers say they don’t want to use office software in the cloud because they want to be able to access documents and work when they’re on a flight or otherwise can’t get online.

“There are workarounds for that,” Henderson said, though he declined to elaborate.

As for the other common objection to using a public cloud — concern about the security and privacy of data stored in a cloud — Henderson said he’s considering Microsoft’s data leakage protection software for Office 365 as well as other options.

Innovating for the bank of the future
Another aspect to becoming a bank of the future is in-house innovation. TD Bank has labs in Communitech and in Cisco’s Toronto innovation lab that it uses to design and test new products. It’s also a partner of the Vector Institute, a collaboration between the University of Toronto, the government of Ontario and the government of Canada around artificial intelligence and machine learning.

“This is a specific example of getting large corporations such as TD into the same space as the universities and this great source of talent, giving the universities some specific use cases or problems to work on, and giving us a pipeline of talent into the company,” Henderson said.

TD Bank is in a test-and-learn phase with AI. The best use case for AI, in his view, is virtual assistants that better understand customers and provide personalized and “legendary” customer experience. It’s testing some options now.

“This will be a super growth area for us going forward, it’s more of a question of how quickly and when rather than if,” Henderson said.

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