Bank of Montreal

is opening an institute that will focus on boosting its quantum computing and

artificial intelligence

capabilities, the Toronto-based lender said on Wednesday.

The BMO Institute for Applied Artificial Intelligence and Quantum will be led by Kristin Milchanowski, who was the bank’s chief AI and data officer until last week. Her role has been expanded to support the bank’s quantum computing goals as well.

“We are expanding our research,” said Milchanowski, who is also a quantum mathematician. “(The institute) is going to provide a platform for AI and quantum to converge. We are going to stay on the leading edge of research of both.”

Quantum computing

has the potential to solve complex problems that are beyond the limits of classical computers, but the technology is still mostly in the experimental stage.

Quantum computing companies are increasingly attracting investors and quickly growing, according to McKinsey & Co., with 39 per cent of the quantum companies it surveyed in 2024 saying they have more than 100 employees, up from nine per cent in 2023.

Milchanowski said her team has hit “quantum utility,” which means they can “do a real business function inside of a quantum environment and get a useful result.”

But she said it’s still early days and that her team’s approach is “very much in a research” state.

“I don’t know of any institution that is actually putting it into production,” she said. “It’s still early, but not too early to be invested in and making sure we are prepared for the near future.”

BMO is exploring using quantum research for tasks such as putting together an optimized investor portfolio, looking for the most “value add” for a risk portfolio and aspects related to anti-money laundering processes.

Banks already rely on AI to boost productivity through activities such as fraud detection and customer service, but don’t utilize quantum technology.

Late last month, BMO said it would rely on increasing the use of AI to meet its financial targets in the next few years.

Chief risk officer Piyush Agarwal said AI has already been “fantastically useful” in issues related to anti-money laundering.

“We get lots of alerts through our algorithm; AI has been able to take down the number of false alerts already by about 10 per cent,” he said at an event in March. “When these alerts go into case dispositions, you have to do an adverse media search that used to take about 180 minutes per search. That time has come down to 20 minutes.”

  • CME, Bank of Montreal team up to launch tokenized cash service
  • BMO accelerates U.S. growth, seeing path to reach target quicker

Other Canadian banks, such as

Royal Bank of Canada

and

Toronto-Dominion Bank

, have also talked about the importance of using AI.

TD in September said it plans to use AI to “simplify processes” and deliver half-a-billion-dollars’ worth of savings, while RBC in March 2025 talked about the importance of winning the “AI arms race” for future growth.

• Email: nkarim@postmedia.com