Harnessing the Power of AI in the Toronto-Waterloo Corridor
The Toronto-Waterloo Corridor is the second largest start-up and technology hub in North America, second only to Silicon Valley.
Recently, the Corridor has found success in establishing itself as a leader in artificial intelligence. Industries across the sector — including financial services and insurance, two industries that sometimes lag behind others due to regulations and a reputation for being slower to adapt — can take advantage of this by collaborating with AI companies and developing innovative new solutions that add value to your business and your customers.
While artificial intelligence is still sometimes likened to Skynet of The Terminator notoriety, the reality is much different.
The type of AI that organizations are investing in isn’t here to exterminate the human race, but rather to understand our consumers better and to create better products and solutions overall. To do this, we have to make sure we adhere to the highest standards when it comes to education in the financial services and insurance industry and privacy for the consumer.
One of the potential burdens to AI is the uncertainty of the technology in general from a consumer adoption standpoint. In numerous studies, consumers have expressed concerns over privacy especially, but these same studies often reveal consumers already provide information in exchange for better products and services. They’re using AI every day in the form of predictive search, virtual assistants, related news stories, recommended products and so on.
The key is to establish trust with your customers by using AI for their benefit and by working it into your business plan gradually and authentically. What better way to do this than by collaborating with other organizations in the Toronto-Waterloo Corridor?
The Toronto-Waterloo Corridor, sometimes referred to as Silicon Valley North, has been on the radar for years, but recent investments from the government and private sector alike are helping to solidify its role in the international AI ecosystem in particular. The challenge comes from ensuring these investments will not just catch the Corridor up to international competitors but move forward and bring new opportunities for innovation and advancement.
Here are three examples of major investments and potential opportunities for the Corridor where AI is a key ingredient for success:
Advanced Manufacturing Supercluster
The Corridor is part of the Advanced Manufacturing Supercluster, one of five Superclusters recently named by the Canadian Government to help establish Canada’s place in world-leading innovation and ground-breaking research. The initiative aims to create more than 50,000 jobs over the next 10 years and will see federal and private-sector funding in the millions. Part of the Supercluster’s mandate is the collaborative co-investment in industry-led projects in AI.
Additionally, the University of Waterloo, one of the backers of the Advanced Manufacturing Supercluster, has also backed the AI-Powered Supply Chains Supercluster in Quebec. This shows the strength of the Toronto-Waterloo Corridor in its ability to also recognize opportunities outside of our geographical area.
Alphabet, Google and Sidewalk Labs’ parent company, has selected Toronto as the first location to build a connected community (or what they’re calling ‘a truly 21st century city’) from the ground up. In partnership with Waterfront Toronto, the project will tap into Toronto’s already-thriving tech sector to create a neighbourhood that uses the latest digital technologies, including AI, to address urban design and urban design challenges. Among its first priorities is mobility, and early talks have discussed the possibility of an all-autonomous vehicle district.
Toronto is the only Canadian city shortlisted as a candidate for Amazon’s second North American headquarters (HQ2). If chosen, the headquarters would mean a $5 billion investment from Amazon and the creation of up to 50,000 more jobs (not including development and construction investments). This would be a huge boom for the entire Toronto-Waterloo Corridor and would help to further solidify the Toronto-Waterloo Corridor’s place in artificial intelligence, innovation and beyond.
Business Value of AI
One of the biggest concerns I see surrounds the sheer amount of money being invested in artificial intelligence companies and projects like Sidewalk Toronto. Hype is one thing, but can these investments produce results?
In a pilot project Kanetix.ca ran in partnership with Integrate.ai, a Toronto-based AI organization founded by former Facebook executive Steve Irvine, we saw that when we were able to use machine learning to better understand our customers, we were also able to increase conversion rates resulting in more sales. We’ve been using AI and machine learning in this way since September and already it’s been able to provide business value and value to our customers, ultimately helping the Canadian consumer make smarter insurance purchasing decisions.
For example, the pilot project looked at customers who had completed a car insurance quote but hadn’t completed the purchase. Our technology indicated that these consumers were offered either a better product at a similar price, or were shown better/lower prices on auto insurance than what they currently had, so why weren’t they purchasing a policy?
We wanted to know more about why these consumers had an opportunity to save money but didn’t call us to complete the quote. Our experiment allowed us to learn more about their motives and create more tailored, transparent solutions for them that drove conversion rates among this consumer group up 13% and increased ROI by 2.3x. The longer we ran the pilot project, the more intelligent our machine learning technology became, and the more our conversions grew.
We’ve become the first InsureTech company to leverage AI in this way. We’re seeing results and we’re confident in the power of AI and machine learning moving forward. We’re now planning to implement this solution across all business lines. These days, it’s still common to associate AI with things like chatbots, but this example shows you the potential of AI and machine learning behind the scenes.
The partnership with Integrate.ai was born of mutual identification in the power of collaboration to create truly innovative, AI-powered user experiences. It stemmed from recognizing the AI talent we have not just in Toronto, but in the Toronto-Waterloo Corridor as a whole.
Working with another Corridor-based organization was an important part of our AI journey. By understanding the sheer talent and the cutting-edge research and development that is coming out of the Toronto-Waterloo Corridor, organizations can harness this to get ahead.
The Corridor is home to 5,200 start-ups, 15,000 tech companies and 200,000 tech workers. Eight of these Corridor-based AI organizations were named on the O’Reilly list of machine intelligence 3.0, and another 10, including Integrate.ai, were recently named as AI companies to watch by Invest in Ontario.
There is major playing power here for companies ready to take their organizations and customer experiences to the next level. Artificial intelligence and machine learning aren’t the future—they’re already here. Figuring out how to make it part of your organization’s process is the next part of the journey.
Remember: The Customer is the First Priority
When dealing with something like machine learning at a time when it’s not widely understood at the consumer level, the success of the project will depend on the way you use the information you gather.
The onus is on us, as organizations, to ensure we’re using AI technology for the right reasons. To do this, we must maintain control and user experience must always be front of mind. The technology we’re using may be helping us to understand user patterns and behaviours better, but it is always us who serves the content and ensures our customers are getting authentic experiences that are relevant to them. We make sure the offers we provide do not violate regulatory standards, and we ensure the infrastructure we have created supports this.
Partner with Corridor companies that offer authentic, transparent solutions that put the customer’s needs first while moving your business goals forward. To find these companies, consider those within the Toronto-Waterloo Corridor.
As President & CEO of Kanetix Ltd., Andrew Lo leads all digital innovation and operations for Canada’s largest digital customer acquisition platform for insurance and financial services.