IBM’s supercomputer Watson is about to get plenty of financial “smarts” thanks to Big Blue’s acquisition of financial consulting firm Promontory Financial Group. Thus IBM takes artificial intelligence into banking and regulatory issues.And it’s a big deal.
“[T]his is a potential lifeline … Watson offers the opportunity to have a world-class partner,” Gene Ludwig, the CEO of Promontory, told American Banker, citing that the move could help financial institutions deal with what the news publication described as “struggling under the compliance burden.”
How big a burden?
IBM notes that “more than 20,000 new regulatory requirements were created last year alone, and the complete catalog of regulations is projected to exceed 300 million pages by 2020, rapidly outstripping the capacity of humans to keep up. Today, the cost of managing the regulatory environment represents more than 10 percent of all operational spending of major banks, for a total of$270 billion per year.”
Watson already is being used in life science – and even as a boost for cognitive ads as well as a movie trailer.
“What Watson is doing to transform oncology by working with the world’s leading oncologists, we will now do for regulation, risk and compliance,” said Bridget van Kralingen, senior vice president for IBM Industry Platforms. “Promontory’s experts are unsurpassed in this field. They will teach Watson and Watson, in turn, will extend and enhance their expertise. This initial offering of Watson Financial Services is emblematic of the transformative cloud-based solutions that IBM Industry Platforms will bring to clients.”
Now comes Wall Street.
A sampling of news headlines reflects the significance of the deal:
- Promontory Financial Group Signs Up With IBM
Wall Street Journal
Promontory Financial Group, one of the best-connected and most powerful financial consultancies, is selling out. The Washington-based firm has agreed to be bought by International Business Machines Corp. IBM, which plans to set up a new unit.
- Watson Financial Services is born out of IBM’s purchase of Promontory Financial Group
If Nathan’s Hot Dog Eating Contest had a big data eating contest brother, IBM would be a serious contender for first place. Today the tech stalwart announced that it had come to an agreement to acquire Promontory Financial Group.
- IBM Is Buying One of the Most Influential Firms on Wall Street
Artificial Intelligence v. Bank Stress Tests. IBM is getting into the business of advising Wall Street—using artificial intelligence. The tech firm agreed on Thursday to buy Promontory Financial Group—a global consulting firm that has advised Wall Street [for years]
- IBM to Acquire Promontory, a Financial Consulting Firm
New York Times
IBM said that acquiring Promontory would mesh with its own offerings, including its Watson platform. In recent years, IBM has been known for its forays into artificial intelligence.
- IBM Buying Promontory Clinches It: Regtech Is Real
“Financial services compliance has reached peak human conditions — you can’t just throw bodies at the problems,” said one analyst. “This is a tremendous market for IBM to get into.”
- IBM buys Promontory Financial Group to give Watson compliance smarts
The IBM Watson supercomputer. IBM said Thursday it plans to acquire compliance consulting firm Promontory Financial Group to bring more financial regulatory expertise to Watson’s cognitive computing platform.
- IBM beefs up AI unit with Promontory Financial deal
IBM is set to acquire Promontory Financial, a Washington-based financial consulting firm, as part of a broader effort to use artificial intelligence to analyse regulations and provide advice to financial institutions.
- IBM Shakes Up AI Race for Banking by Buying Promontory
For banks struggling under the compliance burden, “this is a potential lifeline … Watson offers the opportunity to have a world-class partner,” said Gene Ludwig, the CEO of Promontory, which is being acquired by IBM to teach the AI about regulatory [issues]
Read the IBM announcement at: