What is IBM Watson?
IBM Watson was originally built to make aid IBM in innovations by
combining artificial intelligence (AI) and sophisticated analytical software to
quickly scan massive quantities of data and answer questions in an easy and
personable manner. A major bonus of using Watson is that it can correct
problems of human error. This question machine pieces over 100 algorithms to
make the case for each answer returned, then makes case based on over all
credibility before producing the correct answer (“A Computer Called Watson.”
N.D.). IBM Watson is currently being used in over 75 industries in 17 different
countries. Watson has helped in a variety of industries, such as
marketing for The North Face and Kia Motors to analyze and mine social media,
identify audiences, predict behaviors, and build targeted marketing plans. IBM Watson is being used in Finance as well
by helping banks comply with new regulations (Gallaugher, 2017).
 |
| https://www.businessinsider.com/ibms-watson-may-soon-be-the-best-doctor-in-the-world-2014-4 |
The Future of Watson: Financial Analytics
Although the introduction of this technology is new to the finance
world, IBM Watson is starting to make a big introduction in the finance world.
Watson’s cognitive computing prowess is almost endless. Because the
device can perform text mining and complex analytics on huge volumes of
unstructured data, it can support a search engine or an expert system with
capabilities far superior to any that already exist (Power, 2015). A
major area of work that Watson is currently taking on is risk and regulations
in the banking industry, managing risk amounts up to 10%-15% of its operating
budget, which equates to roughly $270 billion per year. With such
constant increasing cost, this number can only increase in time. Not only does Watson help with this, but with
regulatory guidelines, which currently amounts to over 300 million pages of
rules and regulations. To help combat this, Watson processes at a rate of 80
teraflops (trillion floating point operations per second). Currently, Watson is
being trained in regulatory compliance with risk management and recognizing
potential complications and to analyze financial transactions for financial
crimes (Trejo, 2017). Each year, institutions spend almost $50 million to
regulate financial crimes. These
processes are very tedious in nature, requiring significant time to collect and
analyze the information to make a final determination. Watson applies cognitive
computing, robotic process automation, identity resolution, network analysis,
machine learning and other advanced analytics to accelerate this process and
monitor the system. By allowing Watson
to oversee transactions, it helps reduce investigation times when actual crimes
take place (Trejo, 2017).
Watson within IVK
IBM Watson will be useful to IVK when assessing risk for loans.
A recent development form the IBM Watson AI system is the deployment for
three improvements of risk management for financial firms. There are
several parts of this initiative; a greater focus on financial risks for
portfolios (including market, credit, and liquidity), a better look at
operational risks (such as financial crimes and compliance), even regulatory
information for differing regions. All of this can be accessed and provided as
part of the IBM Watson’s report. With his background in loans, Jim Barton
would find the use of IBM’s Watson useful to the IT Department to aid in the
assessment of current financial trends and operational risks to better manage
their stock portfolio. Additionally, Watson could help IVK process customer
inquiries (2.2+ million) and sort them based on overall profitability.
This would increase the firm’s overall turnover which in turn would
increase profitable loans funded.
References
Austin,
R. D., Nolan, R. L., & ODonnell, S. (2016). The adventures of an IT
leader. Boston, MA: Harvard Business School Publishing.
“A Computer Called Watson.” N.D. Icons of
Progress: A Computer Called Watson. Retrieved from http://www-03.ibm.com/ibm/history/ibm100/us/en/icons/watson/
Groenfeldt,
Tom. (2018, June 21). IBM’s Watson Takes on Risk and Regulation in Finance. Forbes.
Retrieved from https://www.forbes.com/sites/tomgroenfeldt/2018/06/21/ibms-watson-takes-on-risk-and-regulation-in-finance/#36bd5003b3d8
John
Gallaugher. (2017). Information Systems: A Manager’s Guide to Harnessing
Technology. Boston, MA: FlatWorld
Power,
B. (2015, May 27). How Watson Changed IBM. Harvard Business Review.
Retrieved September 2018, from https://hbr.org/2014/08/how-watson-changed-ibm
Rouse, M., & Burns, E. (2018, June). What
is IBM Watson supercomputer? - Definition from WhatIs.com. Retrieved September
2018, from https://searchenterpriseai.techtarget.com/definition/IBM-Watson-supercomputer
Trejo,
Christina. (2017, June 14). With Watson Financial Services, IBM Launches
Cognitive Era of RegTech. IBM. Retrieved from
https://www-03.ibm.com/press/us/en/pressrelease/52573.wss
No comments:
Post a Comment