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June 10, 2019updated 14 Jul 2022 6:38am

HSBC Settles on AI Partner After Five Month Hunt

The deal is the first of several planned AI partnerships

By CBR Staff Writer

HSBC has signed up Canadian software company Element AI after a five-month hunt for an Artificial Intelligence partner, amid an ongoing drive to deliver new products powered by insights from a newly collated data lake. The agreement is the first of several the bank anticipates announcing in coming months.

Element AI is a AI software company co-founded in Montréal in 2016 by entrepreneur JF Gagné and Professor Yoshua Bengio, PhD; a joint winner of the 2018 ACM Turing Award for his longstanding work on deep learning.

HSBC is building an AI-powered Client Intelligence Utility (CIU) built on 10 petabytes of corporate and institutional client data from 1.6 million clients. The utility will be underpinned by the largest aggregation of corporate and institutional client data HSBC has ever put together: 22,000+ physical tables of information.

The project is being led by Chuck Teixeira, Chief Administrative Officer and Head of Transformation, HSBC Global Banking and Markets.

HSBC AI Partner Hunt Follows Data Harmonisation Efforts Across GBM Division 

Teixera said: “Our goal has been to find the best firms engaging in AI research and to be able to learn and partner with these companies which will allow us to co-develop new products for our clients and the broader financial services industry.”

The agreement with the new HSBC AI partner will provide a base for joint development of AI-based software and systems which will be tested on HSBC’s global data pool in a secure environment, HSBC said today.

The Element AI team working on this partnership will be based in HSBC’s new innovation lab in Toronto that was opened last month.

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“Following the creation of our big data programme in 2018 and the recent opening of our global innovation and data labs in London and Toronto, our collaboration with Element AI represents the next step in our AI transformation at HSBC,” said Andre Cronje, Chief Operating Officer for GBM.

Read this: HSBC Ramps Up Data Science Efforts with New London Lab

HSBC plans harness AI to tailor how products are structured, offer predictive insight into how macroeconomic and geopolitical events can impact a client’s global risk profile  – allowing it to hedge exposure  – and help automate compliance efforts.

A planned AI “Client Intelligence Utility” will support client products and services as diverse as loans, FX services or assistance in entering new markets.

HSBC currently processes millions of transactions daily, sourced from 200 different data systems, 66 jurisdictions, 14 major product lines, and 75,000 data fields.

The bank reported profit after tax up 31 percent to $4.9 billion in Q1, and invested $1 billion in the quarter on “medium-term initiatives to grow the business and enhance our digital capabilities.”

Element AI co-founder Yoshua Bengio was named 2018’s winner of the Turing Award alongside Geoffrey Hinton: emeritus professor at the University of Toronto, a VP and engineer fellow at Google, as well as the chief scientific advisor at the Vector Institute; and Yann LeCun: a professor at New York University and VP and chief AI scientist at Facebook. The three computer scientists worked on neural networks even when it wasn’t the leading trend in the field.

“For years, at the machine-learning conferences, neural networks were out of favor, and Yoshua would be there cranking away on his neural net,” University of Colorado professor Michael Mozer told Fortune last year.

‘“I’d be like, ‘Poor Yoshua, he’s so out of it.’”

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