Promontory's 600 professionals and offerings will form the
foundation of new Watson Financial Services portfolio from IBM's
Industry Platforms business
ARMONK, New York, Sept. 29, 2016 /PRNewswire/ -- IBM (NYSE: IBM)
today announced plans to acquire Promontory Financial Group, a
global market-leading risk management and regulatory compliance
consulting firm. Upon close, the capabilities of Promontory
combined with IBM's deep industry expertise and Watson's cognitive capabilities will directly
address the massive operational effort and manual cost of
escalating regulation and risk management requirements.
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Promontory's 600 professionals are based in North America, Europe, the Middle
East and Asia Pacific -
many of them have deep and varied expertise amassed over decades as
senior leaders of regulatory bodies, financial institutions and
Fortune 100 corporations. Promontory is widely regarded as
the firm financial institutions turned to for guidance coming out
of the 2008 financial crisis. The firm's expertise and offerings
directly address the standards for compliance implemented to ensure
the integrity of the financial system, protect consumers and build
trust through transparency.
More than 20,000 new regulatory requirements were created last
year alone, and the complete catalog of regulations is projected to
exceed 300 million pages by 20201, rapidly outstripping
the capacity of humans to keep up. Today, the cost of managing the
regulatory environment represents more than 10 percent of all
operational spending of major banks, for a total of $270 billion per year2.
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.
Upon close, 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.
"What Watson is doing to transform oncology by working with the
world's leading oncologists, we will now do for regulation, risk
and compliance," said Bridget van
Kralingen, senior vice president, IBM Industry Platforms.
"Promontory's experts are unsurpassed in this field. They will
teach Watson and Watson, in turn, will extend and enhance their
expertise. This initial offering of Watson Financial Services is
emblematic of the transformative cloud-based solutions that IBM
Industry Platforms will bring to clients."
Promontory will begin to accelerate IBM's development and
machine training of cognitive solutions for risk and compliance.
This includes solutions for tracking constantly changing regulatory
obligations, expectations and control requirements, as well as
solutions that address specific compliance needs, such as financial
risk modeling, surveillance, anti-money laundering (AML) and Know
Your Customer (KYC). In addition, Promontory professionals will
extend IBM's consulting and services offerings to help clients
dramatically reduce the cost of regulatory compliance.
"We believe the future of business and regulation will be driven
by the need for advanced technology alongside deep subject-matter
expertise," said Eugene Ludwig,
Promontory's founder and CEO. "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. It will enhance our mutual commitment to risk management and
regulatory compliance excellence, and our results will benefit
customers and the overall financial system."
Promontory will operate as a wholly owned subsidiary of
IBM. The planned acquisition represents the first example of
new capability from IBM's Industry Platforms business, launched in
August. The new business was formed to build open vertical
platforms – the first comprehensive "as a service" offerings
designed from the ground up for individual industries. These
platforms will integrate IBM Cloud, Watson and capabilities from across digital
ecosystems of specialized providers, and serve multiple clients in
an industry – delivering dramatically reduced costs for outcomes
spanning speed, quality, audit-ability, security and
transparency.
Promontory is headquartered in Washington, D.C. and has 19 offices in
North America, Europe, Asia,
Australia, and the Middle East. The planned acquisition is
expected to close in late 2016 and is subject to applicable
regulatory review and customary closing conditions. Financial
details were not disclosed.
For more information visit ibm.com/
IBM Media Relations
Karen
Davis
karend@us.ibm.com
Tel: 917 346 4406
Promontory Media Relations
Stephanie Allen
sallen@promontory.com
Tel: 202 370 0533
1 Tech and Finance, 2016
2 McKinsey Global Banking Pools, 2016