BMO bets on quantum computing and AI to predict earthquakes and respond to natural disasters

BMO Files Provisional Patent for Quantum Algorithm to Predict Earthquakes

Bank of Montreal is advancing into uncharted territory for financial institutions, filing a provisional patent for a quantum algorithm designed to help predict earthquakes1

1

. Kristin Milchanowski, BMO's Chief AI and Quantum Officer, created the algorithm as part of the bank's broader strategy to leverage quantum computing for seismic forecasting2

2

. The move comes as the Canadian bank expands its US presence following its $16 billion acquisition of California's Bank of the West in 20231

1

.

Milchanowski, who previously worked at financial institutions including Morgan Stanley and JPMorgan Chase & Co., explained that over 60% of BMO clients are located in territories vulnerable to earthquakes in both Canada and the US1

1

. While the quantum algorithm still requires testing and validation, the bank sees long-term applications in catastrophe modelling and insurance underwriting. "Down the road, we absolutely can use our own research to better inform our insurance positions," Milchanowski said1

1

.

AI Deploys Mobile Banking Units to Wildfire Response Zones

Beyond earthquake prediction, BMO is using AI to address immediate disaster response needs. The bank has developed technology to dispatch mobile banking units to communities impacted by wildfires, including those that devastated Los Angeles in early 20251

1

. Those fires killed 31 people, destroyed more than 16,000 structures, and caused up to $131 billion in economic and property losses1

1

. BMO's AI models identify communities cut off by wildfire and route banks-on-wheels to restore financial services faster2

2

.

This wildfire response technology is being integrated into BMO's emergency response system, representing a shift from AI-as-marketing to AI-as-operations2

2

. The approach helps the bank mitigate risk while serving clients during climate-driven disasters that are increasing in frequency and severity.

BMO Institute Consolidates Quantum Computing and AI Research

BMO formalized its technology ambitions on April 9 with the launch of the BMO Institute for Applied Artificial Intelligence & Quantum, an enterprise-wide center designed to consolidate research, governance, and applied work across both technologies2

2

. Days after the Institute's announcement, BMO established partnerships with Quantum Industry Canada and the Chicago Quantum Exchange, two leading quantum policy and research organizations in North America2

2

.

The bank joined IBM's quantum network in early 2025, positioning itself alongside other major banks investing in the technology1

1

. Milchanowski echoed IBM's projection that usable quantum computers will be achieved by 2029, noting that "quantum is probably three years away" compared to estimates of 20 years made just five to 10 years ago1

1

. The finance industry is expected to benefit significantly from quantum computers, which can sort massive data volumes and solve complex mathematical problems exponentially faster than traditional machines1

1

.

Cybersecurity Risks and AI Threats Under Scrutiny

As BMO accelerates AI deployment, the bank faces mounting cybersecurity risks. BMO is among major financial institutions that recently met with the Bank of Canada to discuss threats posed by Anthropic's latest AI model Mythos and similar systems1

1

. The bank works exclusively with Amazon Web Services, Microsoft, and Google for its AI tools, though it may have exposure to other models through its suppliers1

1

.

Milchanowski emphasized that her team only pursues AI initiatives that move one basis point for the firm, either by generating revenue or creating equivalent cost reductions1

1

. She expressed confidence in the banking sector's ability to handle emerging AI threats through collaboration with other banks, governments, and Big Tech companies1

1

.

Financial Industry Splits on Quantum Investment Strategy

BMO's quantum push comes as the financial industry diverges in its approach to the technology. While Goldman Sachs has scaled back parts of its quantum research, JPMorgan Chase & Co. continues to invest2

2

. BMO's announcement positions it firmly on the investment side, though on a smaller scale than some Wall Street peers. The bank runs a small team of quantum specialists focused on applications that could transform credit scoring, fraud detection, and risk management in addition to disaster prediction2

2

.

Whether quantum computing delivers returns within typical investor horizons remains uncertain, as consensus estimates suggest quantum hardware capable of solving real-world problems faster than classical computers is still several years away2

2

. BMO is essentially arguing that the risks of being late to quantum outweigh the costs of being early, particularly for a bank with substantial climate change exposure across North America2

2

.