OMERS To Leverage AI in Strategic Partnership With the Vector Institute
OMERS and the Vector Institute are entering a five-year strategic engagement that will see the two organizations collaborate, benefiting the pension plan and contributing to the work of the Canadian artificial intelligence (AI) ecosystem. Among the Vector Institute’s existing participant group from across financial services and other sectors of the Canadian economy, OMERS is the first pension plan to participate, building on AI progress that is underway across the organization.
“In the last few years, we have made great progress in leveraging data and technology and there is strong appetite to continue to build on our ability to harness the power of data and insights to support growth and value for our members. To that end, we have established a reliable framework, developing a solid data foundation that we can trust and use responsibly,” said Monique Allen, Executive Vice President, Data & Technology, OMERS. “Our work with the Vector Institute will enable us to more fully explore and act on opportunities to use machine learning and AI more broadly to innovate and lead for the future that will ultimately benefit OMERS and our 526 000 members.”
Established in 2017, the Vector Institute works with industry, institutions, startups, and government to advance AI research and drive its application, adoption, and commercialization across Canada. Vector’s scientific network currently includes more than 600 active researchers and practitioners from across Canada with expertise in machine learning and deep learning, including many who specialize in applied AI and claim top prizes from the world’s most important conferences and journals.
This engagement enables OMERS to participate in Vector’s proven model of applied AI collaborative projects, which bring technical professionals at different participating organizations together with Vector’s world-renowned researchers to develop hands-on experience with AI models and techniques and apply them to create business value within their organizations. OMERS also has opportunities to access Vector’s advanced compute environment, AI engineering capabilities, diverse talent and recruitment services, and professional development and training programs to help accelerate the application of advanced AI within the organization and develop the AI expertise of their teams.
"Vector is delighted to work with OMERS, which is paving the way for innovations in pension and asset management where big data and AI have the potential to unlock positive business and societal impact," said Garth Gibson, President and Chief Executive Officer of Vector. “We are pleased to welcome OMERS to our industry community.”
This engagement with the Vector Institute is a natural complement to the work that has already been done at OMERS. In 2020, OMERS established an internal AI Centre of Expertise to guide and drive development in this area. Existing work in AI and machine learning has led to generating portfolio insights, optimization of business processes, deploying AI in a responsible and ethical manner and advancing Environmental, Social and Corporate Governance (ESG) goals. OMERS is also in the process of introducing a Data and AI Academy to increase employee skill development and experience in this area.
“In addition to the acceleration of our AI strategy, we are able to tap into the experts and research of the Vector Institute through this arrangement,” said Sami Ahmed, Senior Vice President, Data and Advanced Analytics, OMERS. “As we advance our capabilities, it is a clear signal to the industry and potential employees that we are serious about innovation. We look forward to sharing perspectives with Vector about our industry to shape future insights and collaborate with like-minded peers to leverage technology in ways that address current challenges and take advantage of opportunities for growth, in much the same way that we have seen in other parts of financial services.”
Founded in 1962, OMERS is a jointly sponsored, defined benefit pension plan, with 1,000 participating employers ranging from large cities to local agencies, and over half a million active, deferred and retired members. Our members include union and non-union employees of municipalities, school boards, local boards, transit systems, electrical utilities, emergency services and children’s aid societies across Ontario. OMERS teams work in Toronto, London, New York, Amsterdam, Luxembourg, Singapore, Sydney and other major cities across North America and Europe – serving members and employers and originating and managing a diversified portfolio of high-quality investments in public markets, private equity, infrastructure and real estate. OMERS had net assets of $114 billion as at June 30, 2021.
About the Vector Institute
The drives excellence and leadership in Canada’s knowledge, creation, and use of AI to foster economic growth and improve the lives of Canadians. Vector’s aims to advance AI research, increase adoption in industry and health through programs for talent, commercialization, and application, and lead Canada towards the responsible use of AI.
, led by top AI practitioners, offer foundations for applications in products and processes, company-specific guidance, training for professionals, and connections to workforce-ready talent. Vector is funded by the Province of Ontario, the Government of Canada through the CIFAR Pan-Canadian AI Strategy, and industry sponsors.
Let me begin by thanking Neil Hrab for sending me this press release earlier today.
I would have loved to talk to Monique Allen but I had a busy day and I think the press release says it all.
To be honest, the first thing I did after reading this was read more about the Vector Institute as I didn't know anything about them:
The Vector Institute is an independent, not-for-profit corporation dedicated to research in the field of artificial intelligence (AI), excelling in machine and deep learning.
The Vector Institute launched in March 2017 with generous support from the Government of Canada, Government of Ontario, and private industry, and in partnership with the University of Toronto and other universities.
The Vector Institute will work with institutions, industry, start-ups, incubators and accelerators to advance AI research and drive its application, adoption and commercialization across Canada.
Pretty cool, they even have detailed policies and audited financial statements which you can read here.
A recent article suggests that Canada is emerging as a global hub of expertise in AI for medicine and healthcare applications and there is huge potential to grow in this area:
In Mamdani’s view, there is ‘considerable’ long-term potential for Canada to develop as a globally significant centre of expertise in medical and healthcare AI – particularly in view of the fact that the country has ‘several key, world class centres for AI including the Vector Institute, MILA, and AMII.’
“I believe federal, provincial, and local investments will continue to grow in this area. One challenge is the coordination of efforts locally and nationally - AI is driven by data and culture. While there are initiatives locally and nationally to consolidate large datasets, the timeliness of data becomes important for actual implementation purposes and comprehensive real-time datasets aren't widely available,” he says.
This strategic partnership with OMERS, the first of its kind with a pension is exciting and will likely pave the way for more strategic partnerships with other large pensions.
As Monique Allen, Executive Vice President, Data & Technology at OMERS states:
“In the last few years, we have made great progress in leveraging data and technology and there is strong appetite to continue to build on our ability to harness the power of data and insights to support growth and value for our members. To that end, we have established a reliable framework, developing a solid data foundation that we can trust and use responsibly. Our work with the Vector Institute will enable us to more fully explore and act on opportunities to use machine learning and AI more broadly to innovate and lead for the future that will ultimately benefit OMERS and our 526 000 members.”
I know for a fact every single large pension plan in Canada is trying to leverage data and technology to the max to be able to add value over the long run.
In October 2020, I wrote a comment about how CDPQ appointed Alexandre Synnett as Executive Vice-President and Chief Technology Officer, aiming to leverage technology for performance, both in investment and risk management activities and in transforming the organization.
It turns out Alexandre and I met a while back and I completely forgot about it, but he's a really nice guy and I'm sure he is very busy with his responsibilities.
Also, recall when I covered PSP Investments' fiscal 2021 results, I noted that David Ouellet was promoted to Senior Vice President and Chief Technology and Data Officer and joined PSP Investments’ Executive Committee in recognition of the important role technology and data will play in our organization moving forward.
I also noted this from the message PSP's CEO Neil Cunningham wrote in the annual report:
Our mandate and responsibilities to the Government of Canada, and to the more than 900,000 contributors and beneficiaries of the pension plans for whom we invest, underpin the strategies we develop to deliver investment performance. Our previous corporate strategy—Vision 2021—has reached its conclusion, having succeeded in building a global footprint and scaling our operations to allow us to diversify our growing portfolio by geography, sector and investment type, while continuously stress-testing and managing portfolio risk. These capabilities have served us well through periods of economic turbulence and market uncertainty, contributing to our solid 10-year return of 8.9%.
Our needs for the future underpin the ambition of our new corporate strategy, PSP Forward. Enduring changes in our investment environment require a renewed strategic focus to ensure we remain well positioned.
PSP Forward will advance how we operate as a global organization focused on insight-driven decision-making that enhances total fund performance and our investments in public and private markets. Fundamental to success will be to increasingly think transversally; to share and leverage resources and capabilities that exist throughout the firm; to test and then fail-or-scale new strategies as their results are measured; and to ensure that we constantly revisit existing programs and priorities so that we adapt as needed to changes in our environment.PSP Forward is anchored by three strategic pillars: (1) enhancing our total fund performance and global operations by aligning our systems, resources and investment focus; (2) generating valuable insights by leveraging hubs that institutionalize our knowledge, data, asset management practices and relationships; and (3) building an engaged and resilient workforce. By rallying all teams across our global footprint to work ever more collaboratively, the strategy will guide how we navigate the challenges in our environment and succeed.
At the heart of PSP Forward is data and this is why during fiscal year 2021, Mr. David Ouellet was promoted to Senior Vice President and Chief Technology and Data Officer and joined PSP Investments’ Executive Committee in recognition of the important role technology and data will play in their organization moving forward.
The challenges are enormous, getting the data and interface right and allowing it to enhance the decision-making is critical to the success of PSP Forward and I can tell you through my extensive discussions with Mihail Garchev, VP and Head of Total Fund Management at BCI, this isn't easy and many of Canada's large pensions are still struggling with this, but it's critical to enhancing total fund management.
Data is also critical to integrate ESG into the decision-making process. In fact, Neil ended his message on connecting to the future by stating:
One of the long-term trends that has accelerated during the pandemic is the investor focus on ESG, including climate change. We believe that ESG risk factors must be taken into account in every investment we make. For every active investment, we integrate ESG risks and opportunities into our decision-making process. Once we’ve made an investment, we then monitor and manage the associated risks throughout its life and use our ownership position to encourage responsible corporate conduct. In so doing, we not only protect and enhance the long-term value of our holdings, we also see significant investment opportunities in this trend, most notably in the transition to a low-carbon economy.Recognizing the importance of ESG considerations in investment decision-making, I joined the CEOs of Canada’s largest pension plan investment managers in a statement advocating for standardized disclosure of companies’ ESG risks and opportunities. Specifically, we called on companies to measure and disclose their performance on material, industry-relevant ESG factors using the Sustainability Accounting Standards Board (SASB) standards and the Task Force on Climate-related Financial Disclosures (TCFD) framework. We also committed to continue strengthening our own ESG disclosure and integration practices and allocating capital to investments that are best placed to deliver long-term sustainable value. We intend to continue increasing our investments in green assets, or assets that already demonstrate strong environmental and climate-related performance. However, we also want to invest in low-carbon enablers and transition assets, which present an opportunity to accelerate the transition to a low-carbon economy. As of March 31, 2021, about 6% of our total assets under management were green assets, which represented about $12.6 billion. PSP is considering the possibility of green bond offerings in the future.
Following up on these measures, we engaged with portfolio companies with whom we had cast a vote by exception through a proxy letter campaign to deepen our understanding of their corporate governance and sustainability management practices during the pandemic. I encourage you to read the Responsible Investment Report (page 86) and climate- related disclosure (page 105) included in this year’s annual report to learn more.
PSP specializes in spotting opportunities on the edge. As we look ahead, we see potential for new types of investments that don’t fit neatly into traditional asset classes but would provide us with non-correlated returns to help achieve our mandate. Many of these types of investments are held in what we call our Complementary Portfolio.
Remember, ESG is about offense and defense, you need to play both and in order to integrate it properly into your decision-making, you need to know what you're measuring or else you're flying blind.
Pretty much every large pension in Canada has a Chief Technology Officer by now, and if they don't, they will need one.
In this regard, I look forward to seeing how OMERS' strategic partnership with the Vector Institute evolves over the next five years.
To be sure, OMERS already leverages its technology and data in many areas including ESG investing but this partnership will help accelerate the application of advanced AI within the organization and develop the AI expertise of their teams.
And if it proves fruitful, which it will, the Vector Institute can help other pensions do the same thing.
We live in a world dominated by big data and advances in AI can be applied to many areas, including improving the decision-making processes at pensions and improving measures and disclosures of climate and other ESG risks.
Of course, skeptics and cynics will wonder what all the fuss is about but in many ways, we are entering a new and exciting period where pensions and other industries can fully leverage the power of AI to improve all aspects of their operations and service their clients/ members a lot better.
Below, covering AI terminology, types of learning, and implications for business, this high-level introduction delivered by Vector's Shingai Manjengwa takes you through the key aspects of AI that working professionals should know.