Steve Ballmer spent more than US$8bil on Skype. Yes, Skype. At the time, it was Microsoft’s largest acquisition ever.
At the time, it was Microsoft’s largest acquisition ever. Six years earlier, eBay had bought the company for US$2.5bil, though that deal didn’t make sense at the time, and eBay was never really able to turn it into a meaningful business. It eventually took a US$1.4bil write-off and sold a majority of the company to outside investors. Eventually, Microsoft came along and there was a meeting, and the company ended up spending a lot of money on a business no one else had ever figured out how to make work.
There was a time, almost exactly five years ago, when Skype could have found its moment. When the pandemic started, and everyone suddenly had to figure out how to work remotely, video meetings became the primary way teams got together. Skype – owned by the world’s largest business software company – should have been the de facto way people communicated. Instead, it was Zoom that became the default way people did everything from school, work, family birthdays, and yoga classes.
Steve Jobs, Apple’s iconic founder and CEO, told his biographer, Walter Isaacson, that “If you don’t cannibalise yourself, someone else will.” The most famous example was the iPod, which was made obsolete by the iPhone. Eventually, someone was going to realise that a computer you carry in your pocket should do more than just play music. If that’s true, it makes sense that Apple would want to be the company that figured it out.
Bank CEO Pay
RBC : Dave McKay, Royal Bank of Canada‘s chief executive, saw his total pay jump to $25.9 million last year, up from $16.1 million in 2023. The increase included a $4-million “special performance-based equity award” linked to RBC’s acquisition of HSBC Holdings PLC’s Canadian operations, according to the bank’s proxy statement
Scotia: Bank of Nova Scotia chief executive Scott Thomson’s total pay increased to $10.3 million last year, from $9.4 million in 2023. Under his leadership, the bank said it “successfully laid the groundwork necessary to execute” its vision and deliver profitable growth
NBC: With a total pay of $12.07 million in 2024, National Bank of Canada chief executive Laurent Ferreira received a 30 per cent increase from his pay in 2023.
CIBC: The head of Canadian Imperial Bank of Commerce, Victor Dodig, saw his total pay increase to $13.6 million last year — second-most amongst the Big Six CEOs — from $11.2 million in
BMO: BMO chief executive Darryl White saw his pay decline for a third year in a row, as he received total compensation of $10.9 million last year compared to $12.5 million in 2023 and $14.2 million in 2022. BMO had a rough year in which it reported higher-than-expected provisions for credit losses (PCLs) — the money banks keep aside to tackle potentially bad loans.
“Canada is very tough. Canada is very — you know, we’re not treated well by Canada, and we have to be treated well,” he said. “Banks are not, as an example, allowed — did you know that? That banks, American banks, are not allowed to do business in Canada. Can you believe that?”
Hmm…Factually, the statement might be incorrect but there is a need to make changes to the banking industry. Here are some of the challenges experienced by Foreign Bankers
1)Regulatory Barriers: Foreign banks face strict regulations that limit their ability to compete with Canadian banks. 2)Deposit Restrictions: Foreign bank branches cannot accept deposits under $150,000, preventing them from serving most retail customers. 3)Capital Requirements: Foreign subsidiaries must maintain separate capital and liquidity, making operations costly and inefficient. 4) Market Protection: These rules shield domestic banks, like RBC, from full-fledged competition. 5) Difficult Licensing: Canada’s conservative banking regulations make it hard for new entrants to gain approval. 6) Trump’s Criticism: President Trump claims Canada blocks U.S. banks, but while they can operate, the system effectively prevents them from disrupting the Canadian banking cartel.
Ontario Securities Commission (OSC), the province’s security regulator, and the Canadian Investment Regulation Organization, Canada’s investment industry watchdog, announced Tuesday a joint review into the sales culture and environment within the banks’ branches.
In the U.S., where several large Canadian banks have grown their businesses in recent years, high-pressure sales tactics drew the attention of regulators following the unauthorized-accounts scandal at Wells Fargo.
The OCC said at the time that it didn’t identify any “systemic” issues involving bank employees opening accounts without customer consent. American Banker reported that the agency flagged more than 250 specific items that regulators wanted fixed at individual banks.
The OCC’s multibank review was sparked by the revelation 20 months ago that Wells Fargo employees opened more than 2 million customer accounts without their permission.
Banks will need to address weaknesses in policies, procedures, and controls; incentive programs; and their risk governance framework
Downdetector, ( Downdetector) is a useful application. It tracks service outages in the financial services, telecom, social media, gaming and more. and answer to the obvious question when you can’t log in – is it me, or them?
On Tuesday, October 22, the Consumer Financial Protection Bureau (#CFPB) published its regulation on data sharing. The rule mandates that financial institutions must securely share consumer financial data related to checking accounts, prepaid cards, credit cards, mobile wallets, payment applications, and other financial services upon a customer’s request. The rule enforces Section 1033 of the Dodd-Frank Wall Street Reform and Consumer Protection Act marking a significant step toward #OpenBanking within the United States.
A few highlights:
Significant revisions have been made to the rule compared to its initial proposal from the previous year.
The CFPB has decided to relieve community banks with less than $850 million in assets from adhering to the rule.
The compliance deadline for the largest banks is now set for April 1 2026.
The rule has also narrowly defined permissible secondary uses of data, barring uses for research purposes.
While banks are provided with specific compliance timelines, similar deadlines have not yet been established for third-party entities that will connect with banks as consumers authorize the sharing of their data.
Capital One Financial acknowledged Thursday that its proposed $35 billion acquisition of rival Discover Financial Services — a deal that faces new antitrust scrutiny from New York state officials — won’t be finalized this year.
Richard Fairbank, Capital One’s longtime CEO, said he anticipates the Discover transaction will close in early 2025, subject to the approval of shareholders and regulators.
When the Discover acquisition was announced in February, Capital One said the deal was expected to close in either late 2024 or early 2025. It stuck with that timeline until Thursday.
“We’re working closely with the regulators as our applications continue to work their way through the regulatory approval process,” Fairbank said during Capital One’s quarterly earnings call. “We remain well positioned to get shareholder and regulatory approvals.”
Those remarks came one day after the emergence of a new potential obstacle to Capital One’s effort to acquire Discover.
On Wednesday, New York Attorney General Letitia James sought a judge’s permission to issue a subpoena to Capital One as part of a previously undisclosed antitrust investigation of the pending merger. Fairbank did not discuss the New York investigation in his remarks Thursday.
EY announced global revenues of US$51.2b for FY24. Deloitte on the other hand reports FY2024 revenue of US$67.2 billion, a 3.1% increase. Overall, the Big 4 have done quite well in the decade. It will be interesting to see how the next decade lines up
Upon first glance, the upper echelons of the rankings have remained stable. JPMorganChase continues to lead the way (for the third year running), followed by Capital One (#2), Royal Bank of Canada (#3), and Wells Fargo (#4). The top-4 banks ranks remain unchanged year-on-year and the North American banks continue to dominate, occupying 7 of the top-10 ranks (up from 6 banks). HSBC ranked #7 in this year’s Index ranking, making it the first—and only—UK bank to crack the top-10
While we are seeing AI use cases entering production at a faster and fasterpace, ROI remains noticeably absent from the conversation. After several yearsof high capital expenditure, talent acquisition, reorganization, investment, testing and experimentation—banks are now being pushed to demonstrate real results
While 26 of the 50 banks are disclosing some sort of outcomes from their AI use cases, initial reporting varies widely in specificity and comparability. Only 6 banks are disclosing realized business impact in financial terms—and only two banks are attempting to estimate realized return on investment across all AI efforts.
These outliers include:
1. JPMorganChase (May 2024): “…roughly the value that we assign to our artificial intelligence use cases is around between $1 billion to $1.5 billion and is in the fields of customer personalization, trading, operational efficiencies, fraud manager, credit decisioning.”
2. DBS (February 2024): “Our use of AI/ML became more broad-based in 2023, and we delivered an economic value of SGD 370 million, more than double that in 2022.”
What is JP Morgan chase doing?
JPMorganChase decisively leads the pack in AI research, representing 35% of all AI researchers affiliated with Index banks.
Alongside RBC, the bank leads in paper submissions to academic conferences— participating in a diverse range of conferences this year, including: CVPR, NEURIPS, ICLR, AAAI, ICLM, EMNLP, ACM SIGIR, and AISTATS. Topics covered a range of advanced ML techniques, including machine unlearning, offline reinforce learning, graph neural networks, and federated learning.
Lastly, the volume of JPMC’s research papers focused on Responsible AI doubled, underscoring the efforts of a market-leading Explainable AI (XAI)team. The bank continued to ramp up contributions to the open soure ecosystem (user review activity on AI GitHub repositories increased 70%)while also expanding its focus on intellectual property (AI-specific patents by the bank increased 55%).
In short, there simply aren’t many areas of the Index where JPMC doesn’t maintain an outright lead. For JPMorganChase, 2024 was the year that continual leadership in the space started showing dividends. During the bank’s Investor Day held on May 20, Daniel Pinto (President & COO) shared the value they assigned to AI use cases was between $1 – $1.5 billion in the fields of customer personalization, trading, operational efficiencies, fraud detection, and credit decisioning. On September 10, Pinto raised the project to approximately $2 billion during the Barclays Global Finance Services conference.
How is RBC doing?
RBC leads the way in Canada, continuing to rank #3 overall in the Evident AI Index. While the bank ranked in the top-10 across all four pillars, performance was particularly strong within Talent and Innovation. While RBC employs only a fraction of the AI Development team found at eitherJPMorganChase or Capital One, it maintains an outsized team focused on AI-specific Software Implementation and AI Product Management. These capabilities allow RBC to move quickly from pilot programs to wider team deployments, as we saw with the recently announced collaboration with TIFIN. that brought the AI-Powered Insights platforms to the US-based Wealth Management team. Also, while well known for its internal tech expo (Catalyst), RBC recently piloted a new AI education program (Leading in Artificial Intelligence) designed specifically for senior leaders and Board members—taught by instructors affiliated with post-secondary universities, who also contribute to the bank’s research arm (Borealis AI).
Most importantly, the bank excels in AI-specific Research citations, Patent citations, and participation in Academic Conferences—underscoring a quality-over-quantity approach that bolster’s the bank’s outsized influence.
Despite these areas of strength, the bank also saw decreases in Leadership and Transparency (alongside Capital One)—largely due to the rapid acceleration by other banks on both fronts.
RBC was one of the pioneering banks to publish a public version of the bank’s guiding RAI principles. Despite being first, this distinction has lost some currency as the number of banks with principles publications more than tripled year-over- year.
How did the other Canadian banks do?
TD Bank also featured for the first time among the top-10 banks—and overall, the Canadian banks demonstrated the highest level of AI maturity across the six regions examined. All banks now rank in the top half of the Index, with a notable nod to CIBC for demonstrating the greatest year-on-year improvement of all the banks in the Index (+19)—particularly, in Transparency (#6). This slingshot up the ranks of the Index underscore a pronounced shift in the bank’s public positioning as it relates to AI since last year.
In particular, Canadian banks excel across both the Innovation and Transparency pillars. In Innovation, RBC, TD Bank, and Bank of Montreal all place in the top-10, rivaling the performance of some of the largest US banks. These three banks went in early, established research labs, and filed patents for emerging IP.
Collectively, these three banks account for 14% of AI-specific research and 9% of AI patents produced by all 50 banks—punching above their weight class. This source of regional strength is unsurprising given the emergence of major AI Hubs in Toronto and Montreal. Geoffrey Hinton, one of the “godfathers of AI” (and now Nobel laureate) spent much of his career at the University of Toronto. Unsurprisingly, all 5 Canadian banks show evidence of an academic partnership on AI (vs. 60% of all 50 banks)—and 4 provide sponsorships and/or fellowship in AI at the PhD level (vs. 22% of all 50 banks).
Unlike their US peers, Canadian banks also outperform within the Transparency pillar, where all regional banks place in the top-20 and 3 banks place in the top-10. This consistency in performance spans multiple elements. All Canadian banks mention RAI keywords in strategic publications. All Canadian banks now demonstrate evidence of adapting risk management framework to address AI.
All Canadian banks have established a senior RAI leader within the bank. And 4 out of 5 Canadian banks now publish RAI principles, which doubled from last year.
Collectively, the Canadian banks represent 20% of RAI talent—led by Scotiabank, which has received numerous accolades for building an “ethical, engaged AI culture.”
TRANSPARENCY = TRUST
Compared to their US peers, the Canadian banks are clearly further ahead when it comes to “building trust” with their customers. As evidenced above, they have made Responsible AI a cornerstone of their overarching strategy, even as innovation accelerates. They may have been forced to do so earlier than others, especially given the high standards set by the Financial Consumer Protection Framework (enhanced in June 2022). Regardless, Canadian banks have led in an area where the rest of the Index is now following suit. This year, 18 banks published RAI principles— triple the number found last year. As a result, US banks might need to reassess their priorities.
Canadian Financial Services 