- IBM launched a new Watson-powered software suite Wednesday that’s designed to help financial institution professionals manage regulatory and fiduciary responsibilities, according to an IBM announcement. The cognitive solutions are intended to help financial professionals to make better-informed risk and compliance decisions.
- Managing risk and compliance currently costs banks 10% to 15% of their budgets, totaling an estimated $270 billion per year, according to McKinsey, IBM reports.
- An IBM subsidiary called Promontory Financial Group trained Watson on 60,000 regulatory citations, and IBM reports that additional data sets will be added over time. The new Watson Financial Services solutions are available on the IBM Cloud.
Experts have long predicted that financial services industry in particular is ripe for disruption via automation. Now it looks as if IBM has taken a big leap forward in that respect.
Because risk and compliance eat up so much of a financial services firms’ budget, those companies are highly motivated to make aspects of financial services more automated. Now that IBM has begun to figure it out, it’s likely we’ll soon see much more as automation of the industry becomes inevitable.
While some in the finance industry fear they will soon see large layoffs as a result, experts say that won’t necessarily be the case.
For example, Bloomberg recently examined how Goldman Sachs Group Inc.’s is now using automation technology to eliminate thousands of hours of work normally performed by humans, including things like arranging and tracking legal and compliance reviews. But instead of putting employees out of work, the company says its now allowing employees that normally conducted those tasks to perform more productive activities.