Bank of Montreal launches AI and quantum institute to deepen research push

Bank of Montreal has set up a new institute dedicated to advancing its artificial intelligence and quantum computing work, as the lender looks to strengthen its capabilities in emerging technologies.

The BMO Institute for Applied Artificial Intelligence and Quantum will be led by Kristin Milchanowski, who recently transitioned from her role as chief AI and data officer into an expanded position overseeing both AI and quantum initiatives across the bank.

“We are expanding our research,” said Milchanowski, a quantum mathematician. She added that the institute will “provide a platform for AI and quantum to converge,” with the bank intending to remain at the forefront of developments in both fields.

The initiative also builds on BMO’s long-standing use of AI, while introducing a more structured effort to develop quantum capabilities alongside governance, ethics, and commercialization expertise.

Quantum computing is widely seen as capable of solving problems that traditional systems cannot handle efficiently, though it remains largely in an experimental phase. Industry momentum is rising, with McKinsey & Company noting that 39% of surveyed quantum firms in 2024 had more than 100 employees, up from just 9% a year earlier.

Milchanowski said her team has already reached what she described as “quantum utility,” meaning it can “do a real business function inside of a quantum environment and get a useful result.” Even so, she emphasized the work is still in its early stages and remains research-driven.

“I don’t know of any institution that is actually putting it into production,” she said. “It’s still early, but not too early to be invested in and making sure we are prepared for the near future.”

BMO is examining how quantum techniques could be applied to portfolio optimization, risk analysis, and anti-money laundering processes, areas where complex calculations can benefit from advanced computing methods.

Banks have already integrated AI into core operations, particularly in fraud detection and customer service, while quantum applications are still under exploration.

BMO has said it plans to rely more heavily on AI to meet financial targets in the coming years. Chief risk officer Piyush Agarwal highlighted its impact on compliance processes, particularly in anti-money laundering.

“We get lots of alerts through our algorithm; AI has been able to take down the number of false alerts already by about 10 per cent,” he said at a March event. He added that tasks such as adverse media searches have been reduced from roughly 180 minutes to about 20 minutes.

Other major Canadian lenders are also scaling their AI efforts. Toronto-Dominion Bank has outlined plans to use AI to simplify operations and generate significant cost savings, while Royal Bank of Canada has stressed the need to stay competitive in what it described as an “AI arms race.”

BMO expands partnerships and technology investments

The launch of the institute comes as BMO deepens its involvement in advanced computing ecosystems. The bank recently became the first Canadian institution to join the IBM Quantum Network, extending its access to quantum infrastructure and research collaboration.

It has also received industry recognition, including being ranked among the top 10 banks globally for AI innovation by Evident AI and winning the Commercial Banking Impact Award for Artificial Intelligence and Advanced Analytics from Datos Insights.

Alongside these efforts, BMO is moving into digital asset infrastructure. The bank plans to roll out a 24/7 tokenized cash platform in partnership with CME Group and Google Cloud, marking the first deployment of CME’s tokenized cash solution on Google Cloud’s Universal Ledger.