A Canadian Bank Uses AI to Take Market Share

The Canadian banks are using every trick in the book to gain market share, but Royal Bank of Canada’s (TSX:RY)(NYSE:RY) latest initiative just might just be the smartest idea from the Big Six in quite a while.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Forget high-pressure sales tactics. Canadians want their banks to give them the tools necessary to become more financially savvy, while saving them money at the same time.

All six of the big Canadian banks talk a big game when it comes to providing real value-added services for their clientele, but rarely do they deliver, in my experience.

Someone who spends a significant amount of time educating himself and his Boomer & Echo readers about the ins and outs of financial matters is Robb Engen, a fee-only financial planner who’s located in Alberta.

Robb is the Echo, and his mom Marie, also a fee-only financial planner, is the Boomer. Together, they’ve helped thousands of subscribers take control of their finances.

A recent blog post from Robb caught my attention, because what he was saying made a whole lot of sense.

Royal Bank looks to AI for customer satisfaction

According to Robb, Royal Bank of Canada (TSX:RY)(NYSE:RY) is the first Canadian bank using artificial intelligence (AI) to help customers do a better job managing their finances. The bank launched NOMI (appropriately pronounced as “know me”) in August 2017, using behavioural finance as the backbone of this service. It’s available to customers who’ve downloaded the RBC mobile app.

“NOMI Insights keeps an eye on your finances, helps you track spending, plan for upcoming expenses and gives you a heads-up when needed, such as an upcoming bill payment,” Robb wrote January 11. “NOMI Find & Save uses predictive technology to identify money in your cash flow that can be automatically saved.”

While I might sound like a commercial, the definition of a good business idea is one that makes and saves people money.

NOMI gets to know the customer’s spending habits, financial activity, and anything else that helps it paint a picture of the person, so it can save the customer money, which is then put aside as savings.

The bank wins because it wants your investment business as well as your banking and mortgage business. By using AI’s predictive technology, RBC looks useful to the customer, and that’s half the battle when it comes to winning market share.

Don’t get too excited

Down in the U.S. and other parts of the world, apps such as Digit (does what RBC app does) have existed for several years — Digit got its start in 2013 and came out of beta testing in Q1 2015 — so it’s not quite like RBC has landed on the moon, but considering Canadian banks move at sloth-like speed when it comes to innovation, NOMI at the very least puts RBC near the front of the pack when it comes to practical innovation and adapting to change.

This leap into the future is probably a big reason why RBC was awarded, for the second consecutive year, as providing the “Highest in Customer Satisfaction Among Canadian Mobile Banking Apps” as part of J.D. Power’s 2017 Canadian Mobile Banking App study.

Bottom line on RBC stock

I’ve never been a fan of RBC, the company or its stock, but thanks to Robb Engen’s post, I’m at least willing to consider it in the future.

That said, I still believe Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM) is the best Canadian bank stock to own, and NOMI’s not going to change that.

Should you invest $1,000 in CIBC right now?

Before you buy stock in CIBC, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and CIBC wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Will Ashworth has no position in any stocks mentioned.  

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Bank Stocks

A worker drinks out of a mug in an office.
Bank Stocks

Royal Bank of Canada: Buy, Sell, or Hold in 2025?

Royal Bank is down 6% in 2025. Is it time to buy the dip?

Read more »

chart reflected in eyeglass lenses
Stocks for Beginners

Seize the Dip: Investment Opportunities Await This April

If you're looking for one and only one opportunity during a market dip, buy this top stock.

Read more »

hand stacks coins
Bank Stocks

Here’s How Many Shares of IGM Financial You Should Own to Get $1,000 in Yearly Dividends

Besides its attractive dividend income, IGM Financial’s strong long-term growth fundamentals could help its stock outperform the broader market in…

Read more »

A person looks at data on a screen
Bank Stocks

Where Will Bank of Montreal Stock Be in 5 Years?

These factors give Bank of Montreal (TSX:BMO) stock the potential to outperform the broader market in the next five years.

Read more »

calculate and analyze stock
Bank Stocks

Where Will TD Stock Be in 3 Years?

Here are some key reasons why I expect TD stock to reward patient investors handsomely over the next three years.

Read more »

Pile of Canadian dollar bills in various denominations
Bank Stocks

1 Dividend Stock Down 10.2% to Buy Now for Lifetime Income

A high-yield stock with a nearly 200-year dividend track record is a screaming buy right now.

Read more »

calculate and analyze stock
Bank Stocks

Why Smart Investors Own Canadian Financial Stocks

Top Canadian stocks like these could help smart investors get strong returns on their investments in the long run.

Read more »

customer uses bank ATM
Tech Stocks

2 Canadian Bank Stocks to Shield Against Market Downturns

Anchor your portfolio with dividends and stability built to outlast trade war turbulence with Royal Bank of Canada (RBC) and…

Read more »