Canadian banks lead in AI adoption but face pressure to show returns
Canadian banks continue to lead in AI adoption, ranking among the top 30 global financial institutions, according to a report by AI benchmarking platform Evident. The report highlights that while AI deployment is accelerating rapidly, lenders are under pressure to demonstrate tangible financial returns from their substantial investments in the technology. Royal Bank of Canada (RY-T) maintained its third-place global ranking for the fifth consecutive year, praised for its strong innovation and ability to integrate AI capabilities across the organization. Alexandra Mousavizadeh, co-chief executive of Evident, noted RBC's established research capabilities and sophisticated AI deployment.
Toronto-Dominion Bank (TD-T) rose three spots to 10th place, focusing its AI investments on high-impact areas like credit adjudication, software development, and customer service. Bank of Montreal (BMO-T) ranked 20th overall but second in adopting responsible AI principles, while CIBC (CM-T) and Scotiabank (BNS-T) secured the 21st and 30th positions, respectively. U.S. banks dominated the top two spots, with JPMorgan Chase (JPM-N) ranking first and Capital One Financial Corp. (COF-N) second.
The report underscores the challenges banks face in proving the financial benefits of AI. Only 12 of the 50 ranked banks reported realized or projected returns from AI activities, up from eight the previous year. JPMorgan Chase expects to generate about US$1.5-billion in realized value from AI by 2025, while RBC aims to create $700-million to $1-billion in enterprise value by 2027. TD has already achieved $195-million in AI value against its $200-million goal for the first nine months of fiscal year 2026 and has boosted its target to $500-million in both revenue and cost savings. BMO projects AI will add more than $1-billion in pre-tax earnings by 2030.
Despite these advancements, many lenders have yet to report results from productivity tools, with only about 1% of financial institutions disclosing direct financial results such as cost savings. As banks continue to invest heavily in AI, senior executives are rethinking staff roles and implementing training to encourage adoption of the new technology.