Award winning travel writer Jenny Southan reports on Toronto’s burgeoning AI revolution, analyzing the urban ingredients needed to be a future tech capital
Toronto is famous for its CN Tower, cold winters, the Maple Leafs ice hockey team, Canadian rapper Drake and TIFF, its annual film festival. What it hasn’t yet gained a reputation for is its thriving artificial intelligence scene, which is quietly setting about changing the world, from ridding banking of fraud and cybercrime, to fighting climate change.
Representative of this Canadian championing of AI is the Vector Institute. The nonprofit was set up last year and is promising to “propel Canada to the forefront of the global shift to artificial intelligence,” combining research and startup incubation. It has already been pulling in machine-learning talent from America’s Silicon Valley, where people are getting sick of the Trump administration. In an interview with CNBC, Jordan Jacobs, co-founder of the Vector Institute, said: “Geopolitics is playing a part – people contacting us have said ‘I don’t want to live in the US’.”
Working on the premise of designing “AI for good”, Toronto based Element AI is a two-year-old enterprise that helps businesses implement ground-breaking AI-based services and strategies. Launched in partnership with deep-learning pioneer, Yoshua Bengio, it last year raised more than CA$100 million in funding and, this year, opened an outpost in London.
The cost of implementing AI can perhaps best be judged by the costs of not implementing it. Arguably, nowhere is this more true than in financial services. To get a better understanding of how AI is being adopted to improve the banking sector, I arrange a visit to Borealis AI, at Toronto’s Mars Discovery District, which is described as “one of the world’s largest urban innovation hubs”.
It’s a beautiful, gleaming glass and steel campus with open walkways built around airy atria. I take a seat in a colourful lounge with exposed brick walls and spend an hour speaking with Foteini Agrafioti, head of Borealis AI and chief science officer for the Royal Bank of Canada (RBC). The lab was set up in 2016 as the RBC Institute for Research, where dedicated teams not only test and experiment, but come up with AI tools that are designed to help banks with everything from ID verification to cybersecurity.
In a bid to predict the future of financial markets, it is using “natural language processing”, a sub-field of AI that analyses text written in any language, thereby comprehending world events by scanning thousands upon thousands of news stories. “We are trying to watch these things and in real-time predict what the impact will be closer to home,” says Agrafioti. “We watch portfolios in this way and try to protect our clients from uncertainty in the marketplace.”
Borealis AI is also working to combat credit card fraud. “People have become smarter about how to abuse fraud detection algorithms, so we want to use machine learning to run in the background of every cardholder and understand their unique behaviour and purchasing patterns so should you deviate from that, it will create a flag. The way I purchase things could be completely abnormal to you, so machine learning allows us to scale up hyper-personalisation,” says Agrafioti.
Agrafioti originally trained as an electrical engineer with dreams of becoming a Hollywood special effects artist, so what inspired her to apply artificial intelligence to the financial sector? “I pitched to RBC because banking is one of the areas that is underserved by AI and I think it is under appreciated what a major role banks play in people’s lives. I come from Greece, which is a country that was hit terribly by the financial crisis, and I saw people’s lives get destroyed because we didn’t understand risk in financial markets. So how about we are able to protect from recessions, or eradicate fraud, eradicate problems with identity and achieve financial health? This bank is extremely invested in seeing communities prosper. It feels extremely good to know you are doing things to help people achieve their goals in life.”
Still a fledgling endeavour, the ambitions of Borealis AI don’t end there – it also wants to use AI to tackle climate change and improve healthcare. “Look at the hurricanes last year. What if we could have better predicted what was going to happen and intervened? Look at fields like imaging – interpreting MRI scans has a 20% human error rate. How can we tolerate this? There are about 20,000 people working in AI internationally but none of them are looking seriously at global warming and healthcare yet. It may be the next big step forward.”
Agrafioti and Borealis AI’s efforts have been well supported by the city she now calls home. But why is AI, in particular, taking off here? First, its publicly funded universities such as the University of Waterloo and the University of Toronto, which is a hub for AI research, produce some of the world’s most brilliant students. Second, the government is issuing visas to workers with specialist skills in computer engineering and data analysis. These can be provided in as little as two weeks, encouraging the brightest minds from abroad to relocate. And third, the government is pouring millions of dollars into supporting research and development. Last year, a CA$125 million ‘Pan-Canadian Artificial Intelligence Strategy’ was announced “that will cement Canada’s position as a world leader in AI”.
Alan Bernstein, president and CEO of the Canadian Institute for Advanced Research credited this, saying in a statement that “this investment builds on Canada’s strength as a pioneer in AI research and will provide a strong foundation for Canada to build on its global leadership in this important and exciting field”. He added: “Deep AI is a platform technology that cuts across virtually all sectors of the economy, with the potential to improve people’s lives. It will help build a stronger and more innovative economy, create high value jobs, improve transportation and lead to better and more efficient health care and social services.” According to experts, spending on AI-related products is predicted to reach US$47 billion by 2020.
Crucially though, this is part of a wider technological information revolution in Toronto. The city’s booming tech scene is now attracting the world’s most powerful players who are opening up offices and labs in the city – not only is it a finalist among 20 North American cities for Amazon’s new global HQ, but it has recently seen Facebook, Thomson Reuters, Uber and General Motors – which is planning to develop self-driving cars – expand their presence. Meanwhile, Google’s parent company Alphabet is planning to build a new “smart district” called Sidewalk Toronto on the Eastern Waterfront.
Providing such organic support for the AI industry will help it grow but perhaps more importantly it will build a market and with all the synergies that creates the space could grow exponentially. Soon the CN tower may not be the only pinnacle the city is famous for.
Jenny Southan is an award winning travel journalist and editor of Globetrender Magazine
Sign up to get the latest Glint news
Receive the GLINT newsletter with the most popular content, platform updates and software guides.