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Generative AI: Balancing Potential and Responsibility

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Unlocking the potential of Artificial Intelligence (AI) in financial services demands a diligent balance between innovation and responsibility.

In recent years, artificial intelligence (AI) has emerged as a beacon of innovation that has the potential to transform industries and society in profound ways, and the world is already witnessing its impact. In healthcare, AI-enabled diagnostic systems are starting to revolutionize disease detection and treatment planning. The transportation sector sees AI’s impact through the emergence of self-driving vehicles, promising more efficient travel. Additionally, AI-powered systems optimize resource allocation in the energy domain, enhancing grid stability and promoting sustainable energy practices.

Like many sectors, financial services is an industry largely guided by data. Banks have long used analytics to better serve clients, whether to ensure the health of the financial system by modelling risk, protect clients through detection and prevention of fraud or to accurately determine funding needs. The statistics behind these models have been refined and stress-tested for decades and, in many ways, form the backbone of governance and decision-making in banking. When novel machine learning techniques were introduced into the mix, they held great promise for the industry as they lifted prediction accuracy across the board, and many banks followed suit with sizeable investments. According to the latest Evident AI Index, a global standard benchmark of AI maturity for financial institutions, banks have increased their employment of AI talent by nearly 10 per cent over just the past year. In essence, a business that is already greatly informed by data can derive direct value from advances in machine learning compared to enterprises that lack this benchmark.

The Canadian AI ecosystem  

In Canada, financial institutions benefit directly from a thriving AI ecosystem. The origins of modern AI can be traced back to Canadian universities and the Pan-Canadian AI Strategy introduced by the federal government. This established a community of highly skilled AI practitioners across Canada. In addition to the prominent talent across the country, Canada has been a leading voice on the ethical use of AI, starting as early as 2017 with the Montreal Declaration for Responsible AI. These trends have profoundly influenced Canadian banks, which were already seeking to invest in upgrading their analytics practices. As a result, the recently released Evident AI Index, a global standard benchmark of AI maturity for banks, shows Canadian banks punched above their weight, with RBC ranking first in Canada and amongst the world’s top three globally for AI maturity across several categories

Embracing the promise, navigating the risks 

Generative AI (Gen AI) is the latest advancement in this field that has captured the world’s imagination. With the advent of Gen AI, a single pre-trained model can solve a multitude of problems, making it the accelerant for this technology. Many believe this scientific development has brought us closer to artificial general intelligence (AGI), although that’s still to be determined. However, the indisputable fact about Gen AI is that it pushed the boundaries of what we thought was possible in human-machine interaction and this holds immense promise for many industries.

Innovative applications in Finance

While Gen AI can be leveraged towards many industrial tasks, one of the technology’s most intriguing potential uses is in enhancing client servicing. When Gen AI is used in this way, it can aid client service employees in assisting clients quickly and providing more comprehensive answers to client inquiries. Most large consumer-facing businesses today are exploring these options. But in doing so, companies need to balance embracing revolutionary technological advancements and responsibly addressing ethical concerns.

Canada is at the centre of this incredible development and has an opportunity to lead the world in the safe adoption of this technology.

Currently, use of Gen AI comes with concerns about privacy, security, misinformation, and client experience that necessitate meticulous consideration. Financial services are among the most risk-critical and regulated industries because of the sensitive nature of the information handled and the impact that business practices can have on individuals and their communities. Technology such as this will only be implemented if all risks and concerns are addressed.

When we embarked on the journey to build state-of-the-art AI systems at RBC, we also took on the responsibility to do so ethically and transparently, to help our clients thrive and communities prosper. Ensuring accountability and reliability in AI is also crucial for successfully applying AI models; therefore, we’ve established rigorous model governance processes to ensure our tools are thoroughly vetted. NOMI, RBC’s AI assistant, was developed with a client-first lens and was a significant leap in enhancing the customer experience by putting AI insights directly in our clients’ hands. AIDEN, the award-winning electronic trading platform by RBC Capital Markets, leveraged advances in reinforcement learning to improve trading quality and earned client trust by offering explainable insights and transparency. Overall, there is a continuum of adoption of AI technology while keeping the bank and our clients safe.

The Future of Generative AI

While the full potential of Generative AI is still being explored, this technology is gaining ground in financial services with solutions that allow immediate productivity gains with direct benefits to clients, all while still under strict human oversight to ensure it is implemented safely and works as intended. An example is the back office, where Gen AI can enable more efficient preparation for client support. RBC and Borealis AI are developing solutions that help our advisors and analysts provide timely, accurate, and personalized advice to clients while navigating large volumes of unstructured data in real-time. This is a direct enhancement of our advisor’s capabilities and a safer use of the technology that places humans – and our customers – at the centre of the solution.

Very few innovations look poised to have such a profound impact on business and society as AI. Canada is at the centre of this incredible development and has an opportunity to lead the world in the safe adoption of this technology. This is not the time to hesitate. Companies must think strategically about AI while also ensuring they have a robust framework in place to address the risks and prioritize responsible development.

About Borealis AI

Borealis AI is a world-class AI research center backed by RBC. Recognized for scientific excellence, Borealis AI uses the latest machine learning (ML) capabilities to solve challenging problems in the financial industry. With a focus on time series modelling, applying ML to financial markets, and responsible AI, Borealis AI is committed to building solutions to transform how individuals manage their finances and futures. As part of its commitment to advancing the development of responsible AI and ML, Borealis AI developed RESPECT AI. This online hub brings open-source research code, tutorials, academic research, and lectures to the AI community, helping to make ethical AI available to all. For more information, visit

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