IBM chairman and CEO Arvind Krishna says it offloaded Watson Health this year because it doesn't have the requisite vertical expertise in the healthcare sector. Talking at stock market analyst Bernstein's 38th Annual Strategic Decisions Conference, the big boss was asked to outline the context for selling the healthcare data and analytics assets of the business to private equity provider Francisco Partners for $1 billion in January. "Watson Health's divestment has got nothing to do with our commitment to AI and tor the Watson Brand," he told the audience. The "Watson brand will be our carrier for AI." Two examples of tech still nested under the brand include Watson Order, which is being rolled out at a number of drive-thrus at fast food chain McDonald's to automate order taking; and Watson AI Ops, which is designed to make IT operations more efficient. "So then why divest Watson Health?" asked Krishna.

Regulatory and compliance issues are some of the most important, complex and resource-consuming problems to solve for any organization, especially for startups with limited resources. Over decades of development, regulatory requirements and documentation have grown into a matter of special expertise and skills to decode. Globally, $80 billion is spent on governance, risk and compliance, and the market is only expected to grow, reaching $120 billion in the next five years . According to ANZ, National Australia Bank has estimated that the cost of regulatory compliance has risen from $A86 million annually in 2012 to $A177 million in 2013 and $A265 million in 2014. Westpac was reported to spending $A300 million on compliance last year.

JOINING "Hamilton", a Broadway show, and concerts by Adele, a British soul diva, on the list of tickets-to-kill-for in New York is a screening in an ugly new office building that recently popped-up in the East Village, a place best known for offbeat culture. There is a ten-week-long queue to see simulations by Watson, IBM's cognitive artificial-intelligence platform. Initially known for stunts such as beating human contestants on "Jeopardy!", a quiz show, Watson has been seeking a wider audience. It has found a vast potential one in the world of financial regulation. Rules have become so sprawling and mysterious that even regulators have begun asking for a map.

In Australia last week, the banking industry was focussed on a parliamentary inquiry into the industry's culture and response to a range of issues from customer complaints to pricing to market behaviour. Meanwhile, in the United States, technology services giant IBM bought Promontory Financial Group, a specialist risk-management consultancy. Promontory had been mentioned back in Australia, not because of IBM, but because it has been overseeing the remediation program Commonwealth Bank of Australia is running to compensate customers given inappropriate financial advice. Founded by a former US regulator, Promontory is recognised as one of the world's leading firms in regulatory compliance, risk management and risk culture. While Promontory has a significant role in Australia and globally (particularly with the ongoing fallout from the financial crisis and the cultural challenges facing banks) the IBM deal is potentially vastly more significant.

Never mind cancer research or climate change: IBM is finally bringing its Watson AI technology to bear on one of the real challenges still facing human civilisation – regulatory compliance. Big Blue has announced plans to snarf up Promontory Financial Group, a risk management and regulatory compliance consultancy, and combine the firm's expertise with Watson's cognitive capabilities in order to address the growing burden of regulation and risk management requirements. Promontory has about 600 workers in 19 offices across North America, Europe, Asia Pacific and the Middle East, and these are set to form the stout-hearted core of a new Watson Financial Services portfolio within IBM's Industry Platforms business. If all goes well, the transaction is expected to close before the end of 2016, but financial details of the deal have not been disclosed. According to IBM, more than 20,000 new regulatory requirements were created last year alone, and the complete catalogue of regulations is projected to exceed 300 million pages by 2020.

"Robo advisors" are a hot topic in the financial advisory business these days. These software applications use advanced analytics to provide investors with "objective" advice that is based purely on data and trends. What's more, they can be programmed to automatically allocate, deploy and rebalance investments. Robo advisors are a form of artificial intelligence and, thus, have numerous advantages over human advisors. For one thing, they always give the same advice regardless of which customer they are dealing with – so there is a consistency factor that is attractive from a consumer and regulatory standpoint.

World-leading tech company IBM is to acquire risk and compliance business Promontory and combine it with its AI division Watson to form a new offering to the corporate sector via Watson Financial Services. US company Promontory has around 600 staff and advises companies on compliance and risk, much as many large UK and US law firms already do. The combination with Watson and its AI capabilities will allow IBM to provide clients with a more automated approach to risk and compliance review, just as some legal AI companies have already been helping some law firms to develop similar capabilities to provide to their clients. Although the company is not branding this as a move into law firm territory, undoubtedly it will have some impact given the increasing focus from lawyers on helping their clients with risk and regulatory compliance. Moreover, since the financial crisis of 2008 the level of investment from large corporates and banks in risk and compliance has growth massively, something that lawyers were quick to target.

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."

IBM is getting into the business of advising Wall Street--using artificial intelligence. The tech firm agreed on Thursday to buy Promontory Financial Group--a global consulting firm that has advised Wall Street's biggest through the annual bank stress tests. Promontory's 600 some ex-regulators and former Wall Streeters will train IBM's artificial intelligence platform, Watson, how to advise financial institutions on regulatory compliance. "Promontory's professionals will train Watson, which will learn by continuously ingesting regulatory information as it is created and through interaction in real-world applications," IBM revealed in a press release, noting the surge in complex financial regulation following the financial crisis. "This is a workload ideally suited for Watson's cognitive capabilities intended to allow financial institutions to absorb the regulatory changes, understand their obligations, and close gaps in systems and practices to address compliance requirements more quickly and efficiently." Promontory has played consultant to banks including Citigroup, Bank of America, and Morgan Stanley, who gravitated toward the consulting firm due to its employee pool full of former top regulators.