IBM RegTech Innovations

How Promontory and IBM are reshaping financial services through AI

Share this post:

The one constant in every compliance professional’s life today is an abundance of pages. Thousands upon thousands of often complex and intellectually challenging rules, regulations and policies that dictate the boundaries of how financial institutions behave. Whether it’s the Dodd-Frank Act, which spans more than 22,000 pages, or MiFID II, which is quickly approaching the 15,000 mark, many compliance officers in today’s financial services environment simply can’t keep up at the high level of excellence they want and our times demand.

A year ago, IBM acquired Promontory Financial Group, a global risk management and regulatory compliance consulting firm, to help compliance professionals make better sense of the always changing regulatory landscape. Combining Promontory’s deep industry and regulatory expertise with the cognitive capabilities of IBM Watson allows us to directly address the financial services industry’s greatest challenges in innovative and powerful ways.

In June 2017, IBM and Promontory introduced a portfolio of solutions for regulatory compliance and financial crimes unlike anything else on the market today. Since that time, we’ve begun applying AI capabilities to real business problems to help clients with the costly and time consuming aspects of understanding regulatory requirements, uncovering financial crimes, and managing financial risk. For example, the combination of IBM Watson technology and Promontory domain expertise has:

  • Proactively identified potential misconduct through application of our voice surveillance technology to discern trader conversations … as opposed to simply investigating events after the fact.
  • Reduced, by almost two-thirds, the time to complete key know-your-customer (KYC) tasks … from more than 13 minutes to just 5 minutes.

Today, and even more so in the years to come, compliance officers are recognizing that only the combination of AI technologies and superior domain expertise can provide the consistent, top-quality compliance solutions that business demands.

With compliance professionals interacting with an AI system like Watson, a dramatic shift is underway. Compliance work is expanding from a center of research, to a center of analysis, corporate insight and competitive advantage. Acting as a helpful colleague, Watson is able to provide valuable insights and evidence to compliance professionals to better inform business decisions. And this is just the beginning of IBM and Promontory’s work applying Watson in financial services. Just last month, our work was recognized as the “Most Innovative Use of AI in a Regulatory Compliance Solution” by the publication, A Team Group. As we look toward 2018, we predict that we will continue enhancing existing legacy systems and we predict that AI will be further integrated into the core of essential business processes.

Throwing more people at the exponential problem of regulatory complexity is no longer the answer. Rather, it is time to start thinking and working smarter, which is exactly what Watson, powered by superior domain expertise, does best: helps professionals perform at their best. By helping them make more informed decisions, understand their obligations, and close the gaps in knowledge and best practices, IBM and Promontory are at the forefront of a technological revolution in the financial services industry.

General Manager, IBM Watson Financial Services

Eugene Ludwig

Founder and CEO, Promontory Financial Group, an IBM Company

More IBM RegTech Innovations stories

Why QIIB trusts IBM Safer Payments for cross-channel fraud prevention

Fraud prevention is about who you can trust. For financial institutions, it’s about understanding the relative risk of a customer, a merchant and/or a transaction, as well as hundreds of different factors including location, amount, device, etc. But for customers, both actual fraud attacks as well as incorrectly blocked legitimate transactions represent a breach of […]

Continue reading

Is “openness” the next big word in financial crime?

About a month ago, I attended the IBM RegTech Summit in London, which brought together a mix of financial services professionals, regulatory experts and technologists. But the terminology was markedly different than most financial crime and compliance events I’ve attended. With terms like “AI,” “machine learning,” “cloud” and “innovation,” you could make a successful run […]

Continue reading

IBM Algo FIRST becomes IBM FIRST Risk Case Studies

In the continued evolution of the IBM Governance Risk and Compliance (GRC) product line, I am pleased to announce that effective today, Algo FIRST (FIRST) is rebranded to IBM FIRST Risk Case Studies. Algo FIRST was acquired by IBM as part of the Algorithmics acquisition which took place in October 2011. During its time at […]

Continue reading