The Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is one of Canada’s most popular banks–both with customers and investors. Up 44% over the past five years, it has easily outperformed the financial sector as a whole. TD’s strong performance has mainly been attributed to its vast and growing U.S. Retail Business, which has outshone its domestic business. Now, there’s another factor in play that could deliver even more good fortune to TD investors: Financial technology (“fintech”).
TD has long been a leader in fintech. As one of the first banks to embrace mobile banking, it has grown its digital presence to the point that its mobile app is the most popular of its kind in Canada, which already makes TD’s tech presence the largest among its peers. But the story doesn’t end there. TD is currently working on new fintech initiatives that promise to make banking easier for its customers. If successful, they could also have spillover benefits for investors. The following are just three of the tech initiatives TD bank is working on to position itself as a fintech leader.
New AI technology
AI is one of the hottest trends in tech today, offering the ability to automate key business processes, it can reduce costs and improve profit margins dramatically. TD recently made its own AI bid by launching Clari, an AI-powered mobile chatbot that can answer customer questions in a natural, conversational style. As Fool contributor Joey Frenette recently reported, customers can ask Clari questions about credit cards, investments, balances, and almost anything else customers ask about on TD Easy Line. For a long time, “robotic” phone operators have been a source of frustration for customers. By improving on these technologies with AI, TD may increase customer satisfaction while cutting costs.
Mobile banking with geolocation
TD has long been an innovator in mobile banking. As one of the first Canadian banks to adopt the technology, it has outperformed all of its competitors in mobile adoption. TD recently updated its mobile banking functionality by adding mobile mortgage services to its app. This feature matches customers with mortgage consultants in their local area using geolocation, allowing for quicker meetings between consultants and customers. If widely adopted, this new tool could increase mortgage growth at TD–which is particularly important given that this key metric has been stalling nationwide.
Digital lending
TD has been investing heavily in digital lending, including online services that let customers apply for loans without having to speak to a representative. In the U.S., TD’s Fit Loan app lets customers apply for unsecured loans of up to $35,000 through their mobile device. Such loans tend to be at higher interest rates, so the service could increase loan revenue if widely adopted. Automated lending applications also decrease the need for human involvement in the lending process, which can reduce costs, although such services may not be permitted due to the regulations in some areas.
