Banks Lead Charge to Adopt AI for Business, IBM CEO Rometty Says
Source: Giles Broom
Banks are positioned to pioneer the use of artificial intelligence to help them retain clients in an era of technological disruption, IBM Chief Executive Officer Ginni Rometty said at a conference in Geneva.
“Financial services, I believe, can and will lead the world into this era,” Rometty said at the Sibos conference on Wednesday, sharing a panel with Sergio Ermotti, CEO of UBS Group AG. “The ultimate competitive advantage is being cognitive.”
International Business Machines Corp. has touted its “cognitive solutions” unit and its Watson artificial intelligence platform as crucial to future growth. Revenue at that unit increased 3.5 percent to $4.7 billion in the second quarter, following five straight quarterly declines, the company reported in July. While IBM hasn’t broken out Watson sales, it makes up only a small portion of the total.
UBS and other global banks are turning to technology to mine data for insight on customers that could help the lenders fend off the encroachment into finance by Internet giants such as Alphabet Inc.’s Google and Apple Inc. Banks are also responding to the threat of fintech startups that offer cheaper and quicker services in areas such as payments and investment management.
UBS Pilots
Rometty said banks including Edinburgh-based Royal Bank of Scotland Group Plc and Brazil’s Banco Bradesco SA are using Watson, which analyzes unstructured data to provide insights in various industries. Financial-services companies need systems with “augmented intelligence” to remain competitive, she said.
UBS embraces technology and is implementing ideas harnessed from the fintech startup competitions the bank runs to find the most promising innovators, Ermotti said. He expressed skepticism about the potential for technology companies to replace banks one day.
“If anybody wants to be regulated as a financial institutions, please join the party,” he said. “But it’s not going to be so easy.”
Financial services is one of IBM’s largest industries and is an early adopter of Watson business solutions, Steve Tomasco, a spokesman for IBM, said in an e-mail. IBM is working w it h UBS on “several cognitive pilots,” he said, declining to provide re venue figures for the sector. --With assistance from Jing Cao
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