How TD’s innovation lab is reimagining its banking experience

TD was an early adopter of the innovation lab model, tasking a Kitchener-based skunkworks with proactively disrupting its own business

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People standing and working together on laptops

Co-op students working in the TD Lab at Commnitech in Kitchener, Ont. (TD Lab)

Ian McDonald is not your typical TD Bank employee.  He wears jeans. He says “cool” a lot. And he works in a funky, open-concept space that looks as if it could be used during off-hours as a set for the HBO series Silicon Valley. (A canvas on an exposed-brick wall nearby is painted with the words “If I had a dollar for every time I got distracted I wish I had a puppy.”)

But McDonald is doing some of the most important work the bank is undertaking these days: He leads TD’s innovation lab in Kitchener, Ont., a high-energy idea factory that uses design thinking and tech know-how to help the staid, blue-chip bank harness new technology and disrupt its own operations before they’re disrupted by competitors from the startup world.

Right now, he’s working with a team that looks as un-banklike as he does: 12 students and three designer/developers (all but two wearing jeans; several in requisite startup hoodies), scribbling madly on Post-it notes. They’ve got three minutes to come up with as many “pain points” as they can—product and service bugs that irritate customers, for which the team will then try to come up with tech-driven solutions. Team members dump their thoughts onto the Post-its, pulling notes off the pad and parking them on their fingers as they accumulate. When McDonald’s timer buzzes, the little yellow and green squares–now being transferred to a wall for discussion—number more than 70. One of them might just be the spark that leads to something new and exciting for TD.

McDonald and his team at the lab churn out hundreds of fresh ideas every month, rapidly prototyping and testing many of them within days of someone jotting down something like “develop a family allowance app.” (That notion was first discussed in spring, 2015. It’s now a downloadable Android app.)

Most of the ideas die on the sticky notes they’re written on, but McDonald says that’s all part of the lean, nimble startup mentality he’s cultivating at the lab, located in Kitchener’s Communitech hub. Others are iterated into existence as quickly as possible–the family allowance app took six months to create and move into the market, a shockingly fast product development time for the banking world. The app was created by his team at the lab, but TD has since opened a larger facility nearby to focus on IT and software engineering.

TD isn’t the only bank aiming to cultivate Silicon Valley-style creative energy and agility. CIBC recently sent up shop at MaRS Discovery District, where it hopes to work with existing startups there to develop new products and services. Internationally, banks like Citi have offered space to startups that want to partner with them in an accelerator-like environment. And consulting firm Accenture runs labs that involve banks like Bank of America Merrill Lynch, Credit Suisse and Barclays.

Suddenly, nabbing a job at a bank looks almost as sweet as getting work at Google. “It’s really cool to have banks so forward-thinking,” says Josh Hill, a computer science student doing a co-op term at TD’s lab. “My friends are like, Wow, I didn’t think working for a bank could be like that.”


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