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Watson set to regulate finance as IBM buys Promontory Financial Group

Promontory Financial’s team of 600 professionals will train Watson to help manage financial risk and compliance.

By CBR Staff Writer

IBM is planning to acquire the US-based consulting firm Promontory Financial Group in order to transform regulatory compliance with its Watson cognitive computing platform.

Promontory advises clients on several financial services matters, including regulatory issues, compliance, risk management, liquidity, restructuring, and cyber security.

Terms of the deal, which is expected to close in late 2016, have not been disclosed.

IBM is using the deal to create Watson Financial Services, a new venture which will build cognitive tools for things like tracking regulatory obligations, financial risk modeling, surveillance, anti-money laundering detection systems.

The new venture will be part of IBM’s Industry Platforms business, which was created last month.

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IBM has set about applying Watson to numerous different use cases.

Established in 2001 by former US Currency Comptroller Eugene Ludwig, Promontory came out as one of the top financial consulting companies banks shifted to after the global financial crisis of 2008.

Upon completion of the deal, Promontory will operate as a wholly owned subsidiary of IBM. Its team of 600 professionals will train Watson to help manage financial risk and compliance.

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Promontory founder and CEO Eugene Ludwig said: “We believe the future of business and regulation will be driven by the need for advanced technology alongside deep subject-matter expertise.

“Combining Promontory’s expertise with IBM’s extraordinary technological capabilities such as Watson will permit us to directly address our clients’ greatest challenges in innovative and powerful ways.”

IBM is partnering with financial institutions to teach Watson the business of retail and institutional banking.

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