Bank of Montreal will leverage a proprietary, cloud-based, risk management analytics solution to forecast loan loss scenarios faster and with better cost-efficiency.

BMO Chief Executive Darryl White referenced the system during the bank’s earnings call Wednesday.  

“We continue to modernize our technology through cloud,” White said. “For example, we’re converting to a proprietary platform to support risk management analytics, which makes forecasting loan loss scenarios 10x faster, more integrated and cost-effective.” 

The cloud solution is part of an overall effort to improve the $1 trillion bank’s risk capabilities, said Chief Risk Officer Patrick Cronin. 

“During the past two years, we have continued to strengthen our risk management capabilities, including automated and data-driven risk mitigation and management processes in the face of macroeconomic and geopolitical risks,” Cronin said on the call. 

The bank has also launched Real Time Transfers that allow customers to transfer funds from their primary BMO account to the investment-focused BMO Nesbitt Burns account in real time. 

Despite economic uncertainty, the BMO has maintained a “long-standing track record of superior risk management through the cycle has proven to be resilient in protecting and growing the bank,” White said. He credited the bank’s strong risk culture and “well-diversified commercial portfolio that is 85% secured.” 

The bank reported earnings of $3.8 million, an increase of $1 million year over year. Technology costs were not broken out specifically but incorporated into corporate services, which saw non-interest expenses at $97.7 million, down 87% from the $747.5 million reported in the second quarter of 2021. 

The bank is also tackling potential developer shortages by expanding in talent hubs in the United States and Canada. White singled out the recent acquisition of Bank of the West and its locations as a key point for this expansion. The bank’s ongoing investment in talent and technology “have delivered resilient performance through the pandemic, and we believe will drive sustained performance in a rising rate environment,” White said. 

Digitalization accelerates 

Digital engagement by BMO customers continued to grow in Q1, as the total number of online users in North America grew by 6% year over year to 3.6 million users from 3.4 million.

BMO provided no more comparative numbers but noted that the number of mobile users grew by 10% year over year. Meanwhile, digital sales, which include credit cards, loans and mortgages, grew by 18%, and digital transactions, which include Zelle payments, bill payments and account-to-account transfers, grew by 7%.  

Technology has played a key role in driving a better customer experience, White said. 

“We laid the groundwork for sustained investments in technology that are driving loyalty, efficiency and growth by delivering leading employee and customer experiences that power real financial progress,” he said.