By Manoj Saxena
IBM Watson Solutions
Imagine asking a computer, “How much money do I need to retire?” or “Should I reshuffle my investments given the volatility of the world markets?” And then imagine getting an expert, personalized response in just a few seconds time.
That scenario is not possible today, but it could be in the not-too-distant future.
It was just over one year ago that IBM’s Watson technology shocked the world by beating two all-time champions on the TV quiz show Jeopardy!. Since then, we have been busy refining and expanding the technology so it can work as well as play. A few months ago, we announced a version of Watson for healthcare. Today we entered the financial services sphere. IBM will help Citi explore how the Watson technology could help improve and simplify the banking experience.
We believe that Watson has the potential to help transform the banking industry. Watson can help loan officers, portfolio managers, financial advisers, customer service representatives and other financial services professionals do their jobs better. The industry is under intense pressure to become more customer-centric in consumer banking and better at sizing up investments and assessing risk in institutional banking. Watson is an insight engine that can improve performance in all segments of the business.
From Watson’s inception, it was clear that it would be a transformational technology. Unlike traditional search engines, Watson understands the question that is asked, finds possible answers, analyzes the evidence supporting each, and delivers answers ranked by its confidence in them. It also learns from its mistakes and successes. That means it can help people make sense of a sea of information. And the more it interacts, the more insightful it gets. Indeed, Watson signals the beginning of a new era of computing—the era of intelligent machines.
Since Watson won on Jeopardy!, we have been adding important new capabilities—giving it an IQ boost, if you will. The Jeopardy! version could respond to a single question with the answer it was most confident in. The business-ready version of Watson will do much more. A person will be able to engage Watson in an ongoing written dialogue aimed at surfacing the most useful insights. After receiving an initial query, Watson will be able to ask for additional information to help it understand more precisely what the human wants to know. People will be able to view the logic and evidence upon which Watson makes a recommendation. In addition, the next versions of Watson will be able to digest not just textual information but also statistical data.
In banking, Watson can take in a huge amount of data–everything from information about customers’ profiles and banking activities to corporate quarterly reports, analyst reports, regulations, credit ratings, government securities filings and the institution’s own rules. In addition, it can gather intelligence from online news reports, blogs, Twitter feeds and transcripts of a company’s earnings call with analysts. This vast cache of information could provide a 360-degree view of a customer and a complete contextual view of many decisions that a bank has to make.
There’s no limit to the things Watson will do for banks. Citi and IBM have agreed to explore the first consumer banking applications. Citi will focus on how the machine’s deep content analysis and evidence-based learning capabilities could improve customer interactions and simplify the banking experience.
It’s too early to talk about Citi’s plans in detail, but here are some scenarios we envision for Watson, in general, in the financial services industry:
Financial advisers could capture a holistic view of a client’s situation in life, their tolerance for risk, and the best outcomes, based on past performance, of people in the same demographic and psychographic groups. From this information, banks could anticipate the needs of their customers. They’ll be able to stage three-way conversations, including Watson, to help their clients explore questions deeply and make sound decisions.
Institutional sales representatives could gather a whole new level of insights that help to form their recommendations on trades, contracts and negotiations on behalf of their clients. Watson would digest everything from traditional analyst reports to SEC filings to blog posts—which no single individual could read and digest on her or his own. If an earthquake strikes a heavily industrialized region of the world, Watson will be able to quickly size up the impact on any number of industries.
Loan officers could be able to query Watson for evidence that an applicant for a commercial loan or credit card is not who they say they are, or has aliases or relationships with other people that might signal a high potential for fraud. They’ll be alerted by the system if a case they’re handling violates bank rules.
One year after Jeopardy!, we’re no longer just playing games. Now, we’re putting Watson to work to help transform whole industries and, ultimately, all of society.