RBC’s CEO says AI helping to curb credit card fraud

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TORONTO (Reuters) – Royal Bank of Canada’s (RY.TO) chief executive, Dave McKay, said on Thursday that artificial intelligence (AI) is helping the bank reduce credit card fraud, and the bank expects to use blockchain technology in its loyalty programs next year.

McKay said at a Reuters Newsmaker event in Toronto with Reuters Editor-in-Chief Stephen Adler that the bank is spending over C$10 million ($8.04 million) a year on artificial intelligence.

McKay said there is a scarcity of talent in AI globally, which means that RBC has to spend a significant amount to attract people with specialist knowledge.

RBC, Canada’s biggest bank, has set up an AI research center in Toronto with 35 staff to conduct pure research with massive data that the bank possesses. The researchers are helping to predict customer behaviors.

McKay said he expects competition to emerge from non-bank companies in the money-moving side of the business as barriers to banking are coming down.

Asked about a remark earlier this month by Jamie Dimon, the chief executive of JPMorgan Chase & Co (JPM.N), that cryptocurrency bitcoin is a fraud, McKay said it should be monitored but said that bitcoin “doesn’t misrepresent what it is.”

RBC is also experimenting with blockchain to help move payments between its U.S. and Canadian banks, Reuters reported separately.