The Bank of Montreal (BMO) is accelerating its investment in technology and automation as it aims to bring in one million net new personal banking customers in Canada over the next five years.
Canada’s fourth-largest lender has spent more than $2 billion on technology and intends to continue to grow that spending at a “double-digit” rate, said its chief executive Darryl White.
“We’re not taking a back seat to anybody on the digital agenda,” he said at the bank’s investor day on Wednesday.
BMO also aims to increase the proportion of earnings from the U.S. from 28% to one-third in that same time frame, organically, he added.
The Toronto-based bank is also aiming to attain more than $1 billion in productivity benefits, including revenue gains and cost savings, by its 2021 financial year.
The bank’s executives laid out its short-term goals for investors on Wednesday as technology continues to reshape the financial services landscape.
Canadian consumers increasingly conduct their banking online or via smartphone rather than in bricks-and-mortar branches, and in turn, the country’s major financial institutions have been increasing technology spending and streamlining their organizations.
White told shareholders at BMO’s annual meeting in April that he was examining the bank with an eye to “lightening the structure” so all roles were in line with the “market opportunity.”
A “material portion” of the $1 billion in productivity benefits will come from different types of automation, White told reporters on Wednesday.
“It might be about half of it, but it’s not just because were talking about replacing a person with an automated task, it’s a lot broader than that,” he said.
Meanwhile, BMO is aiming to add another one million net new personal banking customers to its existing seven million in Canada over the next five years, said Cameron Fowler, BMO’s president of North American personal and business banking.
He noted that there are a couple of million banking customers “in play” in Canada every year, including 200,000 new Canadians coming in and the bank is looking to snap up a larger share than it has in the past.
That increase will be fuelled by digital initiatives, he said.
“By the time we reach this goal, 50% of the things we sell will be via digital,” Fowler told reporters on Wednesday.