BMO Turns to AI and Quantum Computing to Predict Earthquakes

Article content

(Bloomberg) — Bank of Montreal is betting on artificial intelligence and quantum computing to help predict earthquakes and respond to wildfires as part of the Canadian bank’s expansion in the US.

Article content

Kristin Milchanowski, the company’s chief AI and quantum officer, said she has created and received a provisional patent for a quantum algorithm that will eventually help BMO and other scientists predict earthquakes. The bank is also using AI to help it mobilize mobile banking units to communities impacted by wildfires like the ones Los Angeles experienced last year.

Article content

Article content

Article content

The technological advancements are a key part of BMO’s expansion in the US after it acquired California’s Bank of the West for about $16 billion in 2023. While the quantum algorithm to predict earthquakes still need to be tried and tested, BMO is going to integrate the wildfires technology into its emergency response system.

Article content

Article content

“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 in an interview at Bloomberg’s office in Chicago. “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.”

Article content

Predicting natural disasters is becoming more important for banks and insurers as climate change increases their occurrence. Last year’s wildfires in Los Angeles killed 31 people, destroyed more than 16,000 structures, forced hundreds of thousands to evacuate and caused as much as $131 billion in economic and property losses.

Article content

BMO, which has its US headquarters in Chicago, has been investing in research to develop quantum applications. It joined International Business Machines Corp.’s quantum network in early 2025. Milchanowski, who has worked for a number of financial institutions including Morgan Stanley and JPMorgan Chase & Co., reiterated IBM’s projection for a usable quantum computer to be achieved by 2029.

Article content

Article content

Quantum Advantage

Article content

The finance industry is expected to be one of the biggest beneficiaries of quantum computers, which are exponentially more powerful than traditional machines. The technology helps sort large amounts of data and solve complex mathematical problems that would take binary computers days, months or even years.

Article content

“The pace at which things are coming at you is faster and faster and faster — I think that’s going to remain true,” said Milchanowski, who runs a small team of quantum specialists. “Quantum is probably three years away. Five to 10 years ago, I would have guessed it was 20.”

Article content

The fast deployment of AI is accelerating quantum, but also bringing security and implementation challenges. Milchanowski said her team won’t take on any AI initiatives unless they move one basis point for the firm. That could happen by either generating one basis point of revenue, or creating an equivalent amount of cost reduction for the bank.

Article content

BMO is among major finance firms that have recently met with the Bank of Canada to discuss cybersecurity risks raised by Anthropic’s latest artificial intelligence model Mythos and similar AI models. BMO only works with Amazon Web Services, Microsoft and Google for its AI tools, but it may have exposure to other tools via its suppliers. She declined to comment on whether the bank has access to Mythos.