AI in Banking: This Week's Major Developments in Canada and Beyond
Nabeel Khan, MBA
Regional Vice President at RBC | MSc in AI Engineering (Nov 2025) | Board Executive | Financial Services & Sales Leader | Banker with AI Expertise
Artificial intelligence (AI) continues to shape the banking industry, driving innovation in financial services. This week, several key developments in AI have impacted banking operations, regulatory considerations, and customer experiences. Here’s a look at the latest AI advancements in the banking sector, with a focus on Canada’s banking industry.
1. Oracle Introduces AI-Powered Pricing in Financial Software
Oracle has added AI-driven pricing features to its corporate finance software, NetSuite, to simplify complex pricing tasks. The AI-powered tool enables businesses to generate price quotes via chatbot interactions, reducing friction in financial transactions. This advancement allows banks and financial institutions to offer more personalized and dynamic pricing structures to corporate clients, increasing efficiency and improving customer engagement (Reuters, 2025).
In Canada, banks such as RBC and TD Bank have been exploring AI-driven pricing models to optimize mortgage lending rates and investment product pricing, enhancing customer experience and profitability.
2. Surge in 'AI Washing' Lawsuits Raises Compliance Concerns
The banking sector is facing increased scrutiny over claims of AI integration, with a rise in investor lawsuits targeting ‘AI washing’—the practice of overstating AI capabilities. In 2024, 15 lawsuits were filed against financial institutions and fintech firms accused of misleading investors about their AI applications, compared to just seven cases in 2023. This surge highlights the growing regulatory risks for banks as they implement AI in lending, fraud detection, and customer service (Reuters, 2025).
In Canada, the Office of the Superintendent of Financial Institutions (OSFI) has recently introduced new guidelines for AI governance in banking. Banks such as Scotiabank and CIBC have been enhancing transparency in AI implementations to ensure compliance with emerging regulations.
3. Commonwealth Bank of Australia Deploys AI Agent for Business Banking
The Commonwealth Bank of Australia (CBA) has introduced CommBiz Gen AI, a generative AI tool designed to assist business customers with banking queries. This AI agent provides ChatGPT-style responses, helping companies streamline payments and account management. The initiative is part of a five-year collaboration with Amazon Web Services (AWS) to enhance computing power and cloud migration. The move underscores the potential for AI to improve business banking services by offering real-time, intelligent financial insights (The Australian, 2025).
In Canada, BMO has been actively rolling out AI-driven chatbots and virtual assistants for business clients, helping automate banking services, streamline operations, and improve digital banking experiences.
4. AI-Driven Lending and Risk Assessment at Qifu Technology
Chinese fintech company Qifu Technology has leveraged AI to enhance its lending and risk assessment processes, reaching new stock market highs. The firm, which specializes in credit technology, reported a 78% increase in earnings per share, showcasing the efficiency of AI in loan underwriting. Qifu’s AI models have achieved a 98.8% accuracy rate in extracting loan collection information, demonstrating how AI can improve decision-making in commercial lending (Investors.com, 2025).
Canadian banks, including National Bank and Laurentian Bank, are increasingly integrating AI into credit risk assessment models, improving loan approval rates and reducing fraud in personal and business lending.
5. AI-Driven Market Volatility Sparks Investor Concerns
The global banking sector is responding to AI-driven stock market volatility after Nvidia lost nearly $600 billion in market value. This was triggered by the unveiling of DeepSeek's cost-efficient AI reasoning model, which raised concerns over an AI investment bubble. Bank strategists emphasize the need for financial institutions to apply AI responsibly, ensuring that AI-based trading and risk assessment tools do not contribute to market instability. As AI continues to influence financial markets, risk management remains a top priority for banks and investment firms (Financial Times, 2025).
Canadian investment firms, including RBC Global Asset Management and TD Securities, are actively deploying AI for quantitative trading, portfolio optimization, and market risk prediction. The focus remains on leveraging AI responsibly while maintaining compliance with Canadian securities regulations.
Conclusion
This week’s developments highlight the accelerating role of AI in banking, from enhancing business banking operations to reshaping risk management and compliance. In Canada, banks are at the forefront of AI adoption, balancing technological advancements with regulatory obligations. While AI presents new opportunities for efficiency and customer engagement, financial institutions must navigate regulatory risks, market volatility, and transparency concerns carefully. As AI integration deepens, responsible and ethical AI implementation will be key to ensuring sustainable growth in the financial sector.
References
But let's not let it take away our work ??
Drug Development Scientist and Quality Control Supervisor
1 个月Yes, I think AI will dominate a lot of things in the future
Financial Advisor at RBC (IFIC, CFSA, CAFA,BCO)
1 个月Insightful
Manager Delegate/Financial Advisor at RBC
1 个月Wow! This is good. I am glad to see the responsibility being used when talking about AI. I am comforted by the fact that Canadian banks are on the forefront of AI usage and they are committed to using it responsibly and accordingly to compliance. I am excited about AI role in pricing of banking products. This will free up my time to focus on Advice rather than on pricing activities.