Bank of Montreal is pushing artificial intelligence and quantum computing deeper into risk and emergency planning, using the technology to manage disaster exposure as its U.S. expansion puts more customers in areas exposed to earthquakes and wildfires.
The Canadian lender’s focus on using AI and quantum computing for disaster prediction and response has become more urgent since its 2023 purchase of California-based Bank of the West, a roughly $16 billion deal that expanded BMO in a region where natural disasters can disrupt households, businesses and local banking access.
Kristin Milchanowski, BMO’s chief AI and quantum officer, told Bloomberg that more than 60% of the bank’s clients are in areas that could be affected by earthquakes in Canada or the United States.
“Over 60% of our clients are in a territory where they could be impacted by earthquakes, both in Canada and in the US,” Milchanowski said. “Down the road, we absolutely can use our own research to better inform our insurance positions, and we can do that even with the wildfire work that we’re doing.”
Wildfire response moves first
While BMO’s earthquake work remains longer-term, the bank is preparing to integrate AI into its emergency response system for wildfires. The technology is aimed at helping BMO decide where to send mobile banking units when communities lose access to branches, infrastructure or financial services after a disaster.
That use case follows the Los Angeles wildfires last year, which killed 31 people, destroyed more than 16,000 structures, forced large-scale evacuations and caused as much as $131 billion in economic and property losses.
Quantum algorithm targets earthquake prediction
Milchanowski said she has created and received a provisional patent for a quantum algorithm that could eventually help BMO and scientific researchers predict earthquakes. The technology has not yet been fully tested, but the bank sees it as part of its broader push to use advanced computing to better understand natural-disaster risk.
Milchanowski noted that practical quantum computing now appears to be arriving faster than she once expected, pointing to BMO’s decision to join IBM’s quantum network in early 2025 as part of its push to develop real-world applications for the technology.
“The pace at which things are coming at you is faster and faster and faster — I think that’s going to remain true,” she said. “Quantum is probably three years away. Five to 10 years ago, I would have guessed it was 20.”
AI growth brings new risks
The same technologies BMO is adopting also carry their own concerns. Milchanowski said the bank evaluates AI projects against a strict financial test, requiring them to improve revenue or reduce costs by at least one basis point.
BMO has also participated in discussions with the Bank of Canada and other financial firms over cybersecurity risks tied to advanced AI models. The bank currently works with Amazon Web Services, Microsoft and Google for AI tools, though Milchanowski said vendors and suppliers could create indirect exposure to other systems.
