Toronto-Dominion Bank’s digital ambitions show the strength of its commitment to fintech, and that’s a credit positive for the bank, says a report published Monday from New York-based Moody’s Investors Service.
TD announced last week that it aims to grow the digital share of its banking product sales to 30% over the next three years in both Canada and the United States (including credit cards, mortgages, checking accounts, and mutual funds).
Currently, 10% of TD’s sales in Canada come through digital channels, although it’s at 21% in the U.S. The bank also aspires to boost the share for self-serve transactions, such as online banking and at automated banking machines, from 81% to 90%.
“The announcement is credit positive for TD because it shows that the bank is committed to significant financial technology initiatives that can improve operating efficiency and fend off new competition,” the Moody’s report says..
Moody’s notes that TD launched a design research laboratory in 2017. This year, the bank has acquired artificial intelligence (AI) startup, Layer 6, which uses AI to learn and anticipate an individual customer’s needs. The report also notes that TD ranks first among the big banks for online banking service.
“The digital sales targets and ‘self-serve’ aspirations will foster continued domestic leadership, a key success factor in an evolving environment for digital banking services,” the report says. “Aspirational targets will ensure high continued customer service levels as U.S. clients increasingly seek digital access to banking services,” it adds.