IBM Watson Group’s New York headquarters. Credit: Michael Nagle/Bloomberg
IBM is planning to acquire Promontory Financial Group, a regulatory compliance consulting firm headquartered in Washington DC. The technology supplier will combine Promontory’s regulatory expertise with the power of Watson, its data analytics and machine learning platform. No financial details of the deal, which is set to close in late 2016, were revealed. The compliance consultancy will operate as a subsidiary of IBM after the acquisition. It will be the first business to showcase IBM’s planned model of vertical ‘as a service’ offerings – integrating specialised businesses with IBM Cloud and Watson to deliver reduced costs to clients. IBM hopes to leverage the power of Watson to analyse and and address compliance requirements. It says that burdensome amounts of regulation in the financial sector, coupled with the rapid pace at which it is increasing, is making it impossible for banks to keep up. The technology provider estimates that financial firms are spending over 10% of their operational budgets on compliance issues. It hopes to bring costs down by using its machine learning platform to aid banks in keeping a handle on the growing body of regulation. Compliance experts will help train Watson by selecting the relevant regulatory and legal texts for the program to process. They will also help the programme learn legal jargon by providing question and answer pairs. Bridget van Kralingen, senior vice president of IBM industry platforms, said: “Promontory’s experts are unsurpassed in this field. They will teach Watson and Watson, in turn, will extend and enhance their expertise.” The data analytics and machine learning platform will complement Promontory’s experts, helping to answer questions in the field of risk and compliance and keep track of constantly changing legislation. IBM says that it will specifically address problems in the areas of financial risk modeling, surveillance, anti-money laundering (AML) and Know Your Customer (KYC). Improved efficiency will be passed on to clients in the form of lower costs and quicker response times.
