Toronto-Dominion Bank

has assembled a group of 40 executives from top lenders and law enforcement agencies, such as Homeland Security and the Federal Bureau of Investigation (FBI), to build out its

anti-money laundering

(AML) program, the head of its wing in the United States said almost a year after the bank was fined by U.S. regulators.

These executives have brought a “tremendous amount of experience,” Leo Salom, chief executive of TD Bank in the U.S., said at the

Scotiabank Financials Summit

in Toronto on Wednesday.

Canada’s second-largest bank has been strengthening its AML program and has taken a number of steps to boost its earnings after agencies in the U.S. hit the bank with billions of dollars in fines and imposed growth restrictions on its operations down south for failing to prevent money laundering at its branches about a year ago.

The changes seem to be working from an earnings perspective, as the bank has beaten analysts’ expectations on a regular basis this year, including in the third quarter, when results were driven by positive performances in its Canadian personal and commercial banking and wealth management and insurance segments.

Its net income for the three months ending July 31 was $3.3 billion, compared to a loss of $181 million during the same period last year when the bank had to keep aside a significant amount of money for investigations related to money laundering.

Salom said the bank had completed a “major milestone” with the start of its “next-generation transaction monitoring platform.” The bank also implemented a new customer risk rating platform and is now “recalibrating the risk across the book,” he said.

In the past quarter, the bank introduced two machine-learning platforms to boost its AML systems by helping the lender detect unusual behaviour on its transaction platform and screening “adverse media screening alerts.”

Salom said the majority of management’s actions when it comes to the AML program will be completed by the end of 2025. However, there will still be “important milestones” that need to be addressed in 2026 and 2027.

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“We are tracking right where we said we would be,” he said.

The bank will spend close to $500 million on its AML remediation program this year and spend a “comparable amount” next year as well, Salom said.

“The investments we’re making here are not only intended to build a world-class AML platform, but they’re leverageable,” he said. “The changes in technology should shore up and should allow us to accelerate and build a more sustainable foundation for the bank.”

• Email: nkarim@postmedia.com