00:00:00:00 - 00:00:23:15
Grant McDonald
When you think small Canadian business, what comes to mind? Maybe a local cafe or a little gift shop that sells unique items you can't seem to find anywhere else? The truth is, small businesses are Canada's economy. They make up 98% of employer businesses and span every sector. That's according to a 2024 statistics report from the federal government. But with fewer resources, they need to do more with less.
00:00:23:16 - 00:00:55:16
Grant McDonald
Enter AI. TD recently asked small business owners how they're using it. Nearly half said for marketing. Others use it for research, data analysis, even turning meeting notes into insights. One TD client, an interior designer, went from skeptical to sold when AI transformed her sketches into photorealistic renderings. I'm Grant McDonald and on this episode of The Banking on AI Podcast, presented by TD Invent, we sit down with Andrew Braun, Associate Vice President, Remote Channels and Distribution Strategy here at TD, where we dig into how small businesses can use AI.
00:00:55:17 - 00:01:08:12
Grant McDonald
Now, the risks to watch for, and how TD clients are already seeing big results.
00:01:08:14 - 00:01:25:05
Grant McDonald
Andrew, first off, thank you so much for being here today. I'm really interested in the conversation that we're going to have. I'd love just to start off with, you know, what your role looks like at the Bank, what it looks like for small business clients. And then we can dive in a little bit deeper to the world of AI.
00:01:25:07 - 00:01:49:18
Andrew Braun
And that sounds great. And thank you for having me. I feel really fortunate because my role at the Bank, at least part of it, is to think about the future for Business Banking and for our small business customers. And so what that looks like is I work within the Bank and within the teams to consider what Business Banking could be in the future, what our customers might need, what our colleagues might need.
00:01:49:20 - 00:02:12:04
Andrew Braun
And think about that from a strategy perspective as well as like a capability and a delivery perspective. That's where AI comes in as we think about how do we use AI now and how can we continue to evolve AI in our business to deliver for our customers? And then another part of my role, which I'm very fortunate to have, is I have direct connection with the customers.
00:02:12:04 - 00:02:36:05
Andrew Braun
I have teams that support customers through their onboarding, and when they have inflection points in their business. And so the great part about that is you get direct feedback of what they're thinking about, what they're worried or they're considering in their businesses, as well as what their opportunities are. And when you hear that, then you can incorporate that back into what are we thinking about from a strategy perspective or from an implementation perspective that will help them?
00:02:36:07 - 00:02:41:11
Andrew Braun
And so it's super exciting. I feel very grateful. But that's a, that's a little bit about my role.
00:02:41:13 - 00:02:57:04
Grant McDonald
I like it because there's, it's, it's interesting to talk about strategy and there's a lot of, a lot of great work happening across TD. It doesn't necessarily mean that you're always interacting with clients. So you have you have the best of both worlds here where you're able to see, hear on the ground what is needed. What does it look like?
00:02:57:04 - 00:03:12:16
Grant McDonald
How do we strategize to, to you know, focus on what is needed? So when we think about the AI journey and your thoughts on it in the past, was there kind of a moment where you're like, this makes sense, and I think that we can do a lot with it.
00:03:12:18 - 00:03:34:11
Andrew Braun
I think there's a I think there's a few moments, Grant. Like the first moment for me, I just moved to Toronto, from Vancouver, and I was doing a role in, risk strategy, and credit risk. And so we had just acquired Layer 6, and we started to really kind of explore machine learning. And what could that mean for us?
00:03:34:11 - 00:03:58:01
Andrew Braun
How could that help us deliver better risk decisions, better credit decisions, better experiences for our customer and our client, and our colleagues. And so that was the start of the thought process. And at the time, there was a there was a lineup, a queue to get that capability. And so I was thinking, okay, well, well, we'll be able to have that, you know, over time and that'll be great.
00:03:58:03 - 00:04:19:08
Andrew Braun
And then there was sort of a next inflection point for, for me, which was, the pandemic. And in the pandemic, everything got uprooted for our clients. Our clients had in a, in an overnight moment, had their businesses shut down, their livelihoods impacted their, their employees. They had a ton of stress going on for, for them.
00:04:19:10 - 00:04:43:00
Andrew Braun
And so in that moment, we knew that they had this stress. We, we saw it out there in the market. And we also knew that we were working with the government to implement a program. It was the Canada Emergency Business Account. But we knew we had, something we had to overcome, which is we had some elements of the business that we would have to move at a more rapid pace than maybe we had before.
00:04:43:05 - 00:05:04:09
Andrew Braun
And so we stood up a digital front door, digital application capability, which we hadn't done before. So that was new. But I think the thing that looks like AI was, I would call it pre-agentic AI, we needed to be able to fund loans at a pace and scale that we never had before. And we delivered this in really short order, because we knew our customers needed it.
00:05:04:11 - 00:05:26:05
Andrew Braun
And within a few months we had we had funded and this might sound outlandish, Grant, but we had funded about eight years worth of loans. And a few months later, at about ten years worth of loans, it was unbelievable. And then that program, we actually allowed customers to increase the loan again. So then we got to do that again.
00:05:26:07 - 00:05:51:13
Andrew Braun
But the kind of a funny anecdote, in that process was, you know, the banks work on, on, business days. Right. So business day one is, is Monday, and we'd been funding all weekend to ensure our clients had, had money. And we got a call on Monday night. I can remember it very clearly. We got a call from our tech team for our loan team because they were really worried something was wrong with the loan system, because it was had all these, like, alarms going off.
00:05:51:13 - 00:06:10:04
Andrew Braun
Right? We had broken the loan system, basically. And, so wehad to reassure them. It's fine. This is fine. This is just because we've enabled this capability to deliver. And so that was like step two. And then the third one really, kind of follows that process. Soon after that, that same loan program had the ability to get forgiveness.
00:06:10:05 - 00:06:30:14
Andrew Braun
And so, we knew as we got closer to the date of that, these customers had to pay off this, certain amount of the loan to gain the rest of the loan as forgiveness that, a lot of them were still struggling. And while they had good businesses and they had a good track record and we knew they were good clients, they would, they would struggle to, to gain that forgiveness.
00:06:30:14 - 00:06:55:16
Andrew Braun
And so we were then able to go back to that machine learning that I talked about earlier and build out a process so that we could pre-approve, tens of thousands of customers and really support a ton of them to get that loan forgiveness. And so when you think about all that, and you think about the impact, those are the things that when I think about my journey, you can start to then visualize what a small business can do with that capability as it comes down.
00:06:55:18 - 00:07:14:19
Grant McDonald
So I think it's, it's fascinating because you're talking about, a lot of time we talk about AI people want to know the future and what can it do and what, you just gave such tangible examples of a small business owner and you need money. Like that is probably the most stressful thing for a business owner. Like where's my, is this going to be able to continue?
00:07:14:21 - 00:07:35:15
Grant McDonald
And you talked about it in a way that is all about speed, all about simplicity. So when you're looking at broader picture at AI, small businesses, and this is always hard to pinpoint, like a game changing moment for them. But are there a couple of moments that stand out when you're talking with clients and saying this can be something quite significant for you, if you do it the right way?
00:07:35:17 - 00:10:17:07
Andrew Braun
Yeah, I think there's like and it really depends on the business. Grant. Like, but I think there are a bunch of game changers for small business owners. But I think you should we need to stop and think about that small business owner. And I talked about that stress a moment ago. That stress is, is there, you know, that it was amplified in the pandemic, but small business owners wear a lot of hats.
Andrew Braun
They are they are the HR department. They are the sales, number one salesperson. They might be the, they might be the manufacturing department. They take care of legal and finance. You know, they outsource and they'll get people working with them. But they are thinking about those things all the time. And so as small business owners, consider that.
Andrew Braun
And they think about AI, what AI enables them to do is take some of that mental load off or be able to extend themselves so they can do more than they could before. And both are valuable, because either or, saves time for a business owner. And time is really so important for them. And so examples of that would be like if they have repetitive tasks so they can automate that they have either themselves or maybe an employee doing and then be able to deploy that a different way.
Andrew Braun
Is, is powerful, you know, content creation, marketing, personalization as they think about how do they address their clients and deliver for them, you know.Other ones that are really tangible. You know, if you're scaling your business, you need to hire. Hiring can be, a difficult process. But if you can use large language models or some of other tools out there to go through resumes quickly identify great candidates, get the right type of candidate for your, position.
Andrew Braun
Then it enables you to focus on what you really want to do, which is continue to grow the company. And so that's, you know, some of the more tangible, immediate ones, but another one that we talked about strategy earlier. Right. And a lot of times a, a small business owner struggles to find the time to think about strategy.
Andrew Braun
And then, you know, in some large organizations that you'll have an advisory board or you can, you can bounce ideas off others to try and figure out where you want to go and develop a, you know, a really coherent strategy. And in some instances, for small business owners, they don't have the time to do that. And so what AI can also do is start that process.
Andrew Braun
They can bounce ideas off their AI advisory board, call it, and they can start the process to build out a strategy for their business that will help them scale or do whatever it is they they're looking to do within the business, within their market. So I think there's lots of game changers for small business, and that's definitely not an exhaustive list.
Andrew Braun
But those are some of the things I think about.
00:10:17:08 - 00:10:40:06
Grant McDonald
And you touched on it earlier in terms of the idea of all of the great stuff that is happening, there's associated risk to a certain degree, which you were able to navigate through that extra stressful time. We can call it. But when you're chatting with clients now, you're saying it can do this, this, this and this. Where are the flags that you sort of raise where like, here are some risks to, to consider, to think about as you approach your next business.
00:10:40:06 - 00:10:41:09
Grant McDonald
You know, fiscal year.
00:10:41:11 - 00:11:09:05
Andrew Braun
Yeah. I mean, almost nothing is without risk. And so you always have to consider those, those downside risks. And so, you know, some of the things that I think about from, a risk perspective would be just like data or security risk. So if you are opening up your information to some sort of external vendor and that could have downstream impacts for your business or your clients, that's certainly one.
00:11:09:06 - 00:11:34:14
Andrew Braun
Another element of risk for, you know, using AI is hallucinations or ethical or bias risk. Right. And so you have to really understand how you're using it and the outcomes that you're, you're getting, you might need to check that the outcomes are correct. So, so not taking maybe at face value the, the initial risk or sort of the initial response.
00:11:34:16 - 00:12:02:19
Andrew Braun
And then another key risk, and it's more like supplier risk that a business operates currently. They'll have supplier risk if you only have one supplier for your main input and that supplier goes away, you have a problem. Well, if you rely heavily on AI or if it's a very important part of your process, and you have one supplier, and as you scale, you may have to start thinking about diversification or at least acknowledge that you have supplier risk if you want to call it that, for your for your AI supplier.
00:12:02:21 - 00:12:08:21
Andrew Braun
So those are some of the, some of the risks. That's again, not an exhaustive list, but some of the things that we talk about, well.
00:12:08:21 - Grant McDonald
They're important as well, because, you know, if I'm using, I'm using Copilot, I'm using other models. It always comes back to me and I say, what about, you know, mixing nuts and gum? Great idea, Grant. Like, I don't think that's a great idea. I think I may have to double check that.
00:12:21:19 - 00:12:22:14
Andrew Braun
That's right.
00:12:22:16 - 00:12:39:02
Grant McDonald
When you're, you know, you talk about the risk, you talk about what you can consider doing. Where are you telling people to lean in? A lot of the conversations we have in this podcast are about you got to be an early adapter, adopter of it, rather, because if you're not, the gap between you and those who are using, it's going to continue to grow.
00:12:39:02 - 00:12:43:07
Grant McDonald
So where are you telling clients to lean in?
00:12:43:09 - 00:13:07:12
Andrew Braun
Yeah. For that I think, it really it depends on the industry and depends on the business. I think, because I think, yeah, certainly early adoption can be really impactful in some businesses. But the other one to think about is how can I deliver it really, really well? How does it really help me? As opposed to being a flash in the pan or some, some flashy object?
00:13:07:13 - 00:13:43:21
Andrew Braun
And the reason I think about that, and this is kind of a more, you know, a large industry type example, but I always think of Apple, and I think Apple is, I can't think of an instance where they were first to market, but when they got to market, they delivered a really great product. Right. And so I think that would be my thought for many businesses is that, yes, lean in practice, try, but certainly make sure that it's fit for purpose and it's the right, delivery of, of of AI for your business, whether it's what business problem are you solving.
Andrew Braun
And is it the right one.
00:13:44:02 - 00:14:00:00
Grant McDonald
Well, certainly no. No size, no one size fits all. And you know, thinking of that, you don't have to give away clients secrets. But I'm very curious about what you have seen when you're working with clients, like what creativity has been created from them using AI and, you know, pushing for it.
00:14:00:02 - 00:14:35:00
Andrew Braun
Yeah, I think I mean, there's lots of examples, out there, lots of creative ways people, use AI. But one that kind of comes to mind and kind of highlights a bunch of the things we talked about in this podcast. We actually had, this, story on TD Stories recently is, an interior designer named Jacquie.
And what Jacquie basically, interior design, as you probably all know, or if you experienced is, is so it's important that you trust the interior designer and it's important that you understand their vision and you can really feel what they want to do. And then when you trust them, that then you're able to deliver, they're able to trust them to deliver what they what they're going to do.
00:14:35:00 - 00:15:07:13
Andrew Braun
And what Jacqie has done is she's in many cases, interior designers will, you know, they'll give renderings or they'll give some sort of visualization of what it is that they wanted to do. And so that's the way she started her business, but she's pivoted it to basically take her renderings and then create photorealistic images for her clients, enabling her to really demonstrate how, how does light look different in this room?
00:15:07:13 - 00:15:54:21
Andrew Braun
What if we change the colours? What does it look like in different times of day? How do I help you understand as I want to convey my vision, what it really feels like for you? And if you have a question, I can adjust it. And it saves her time. But it also creates a vision for her clients that enables her to avoid sort of that more, difficult, conversation after where it maybe doesn't match up with the vision or, or it, it is a more difficult project than they then they want because they're halfway through.
Andrew Braun
You're changing it. And so I think that's a great example of creativity because it's what she already does. But she's taking this to the next level by just using an AI tool to really help her clients understand and feel what it is that she wants to deliver.
00:15:54:23 - 00:16:13:01
Grant McDonald
Listen, Andrew, thank you so much for sitting down today, having a conversation. It's so interesting to get your insights because you have this world of the future of AI, but also very, very tangible examples as to what your clients are doing with it and where they're going. I always like to ask people who come on the podcast, we have a lot of people listening in the industry that we work in.
00:16:13:03 - 00:16:18:04
Grant McDonald
And I always love to get your insight as to what you'd like to leave them with. Kind of a final thought, if you will.
00:16:18:05 - 00:16:40:11
Andrew Braun
Yeah. That's, thank you for that. Let me I think what I would want to say is, and it kind of links back to what I talked about a minute ago is around augmentation. At TD we're thinking about how to be remarkably human, right? And remarkably, can be remarkably powered by AI. And that's kind of how we're thinking about how we deliver, in, in our universe.
00:16:40:11 - 00:17:06:10
Andrew Braun
But I also think that's also in almost every industry, what the way they need to think about it as well, because it's there to help our small business owners really find ways to deliver for their clients. And we're going to continue to use it internally to do the same. And I think when you keep that idea of how do you augment the human element to really enhance your client experience.
00:17:06:14 - 00:17:09:18
Andrew Braun
That's, that's kind of the North Star, if you will.
00:17:09:19 - 00:17:11:17
Grant McDonald
Fantastic. Andrew, thank you so much.
00:17:11:19 - 00:17:12:06
Andrew Braun
Thank you.
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