IBM Shakes Up AI Race for Banking by Buying Promontory

IBM has agreed to buy Promontory Financial Group -- a consultancy so influential it has been dubbed the industry's "shadow regulator" -- in a move that could extend artificial intelligence into every aspect of banking. Under the deal, which was announced Thursday, Promontory's stable of ex-regulators and former industry executives will be tasked with teaching IBM's Watson to address risk management and compliance issues at banks. The goal is to create an AI capable of sifting through reams of data collected by banks to find potential problems and suggest solutions. "We can very quickly help financial institutions have a much more complete and continuously updated view of what the landscape is," Alistair Rennie, a general manager for industry solutions at IBM, said in an interview. "There are systems now that throw out alerts all the time. The work of going through which ones need follow-up and documentation is very manual and very inefficient. We believe we can absolutely solve that problem with a cognitive solution. We can make it far more effective, far more automated."