SINGAPORE--DBS Bank has unveiled plans to implement IBM's Watson cognitive computing technology as part of efforts to gain better insights and improve its customer experience, becoming Asia's first Watson customer.
In a media briefing here Thursday, DBS Bank CEO Piyush Gupta said the initiative would allow the bank to look at ways to tap data and provide more "precise, customized, and quality" offerings that were more in line with its customers' needs.
The Singapore bank will pump some S$15 million (US$11.8 million) over three years into Watson, which will initially be deployed across its wealth management business to provide deeper insights and enable its relationship managers to offer better advice. Rollout is expected to be completed by end-2014 and will eventually be extended to other divisions across DBS.
Gaining business intelligence is increasingly crucial but difficult, as the world and customer needs continue to evolve rapidly, Gupta said. How things are done today will be fundamentally different to how they will be done in the next three or five years. In future, customers will want banking services but not the banks, and do not need brick-and-mortar branches. Instead, they will want banking services on-the-fly, and banks such as DBS need to be ready to meet such demands, he said.
"Can we make this shift into how people interact with banks? To me, that is the million dollar question. The reality is, industry after industry, companies that are not able to make the shift are today just names on a sheet of paper," he noted, pointing to Borders as examples.and
This is happening in banking, he said, and added that DBS Bank's competitors today include the likes of, , , and others that never existed previously in the market.
Gupta has high hopes the bank's investment in Watson will "redefine" how voluminous amount of data--structured and unstructured--can be properly analyzed to provide intelligence that was previously not "humanly" possible. The initiative is an extension of its ongoing relationship with IBM, which includes the.
"Data and business strategy are absolutely intertwined, and there's no business strategy now that doesn't take into account data and data analytics," Bridget van Kralingen, IBM's senior vice president for global business services, said at the briefing. With capabilities of cognitive technology, DBS can analyze all of its data and make available the bank's best relationship management skills as well as best practices and course of actions to all of the company's relationship managers.
Asked about the ROIs (returns on investment) the bank expects out of Watson, Gupta said it was too soon to set KPIs (key performance indicators), adding that he sees the initiative as "experimental". "We're confident enough in the concept of cognitive computing and will make the commitment to get it to work, but in terms of specific KPIs and ROIs, it's too early," he said.
Van Kralingen also underscored the significance of Watson to IBM's growth strategy, pointing to its announcement today to. She noted that the last time the company created a separate division around technology involved its mainframe business.
Operating out of New York, the new Watson Business Group will have some 2,000 employees focused on software, services, research, and sales. Its US$1 billion investment includes US$100 million set aside to fund startups developing cognitive applications.
IBM in 2011 operated Watson as a business unit to commercialize the cognitive computing technology, made famous after it beat two human contestants in TV gameshow, Jeopardy. However, to date, the unit has and the tech giant is still trying to figure out "how to generate a reliable revenue stream" from Watson, said CEO Ginni Rometty. IBM primarily has targeted the healthcare and financial services sectors, signing up U.S. healthcare providers Wellpoint and in 2012.
Rometty is aiming for Watson to generate US$10 billion in annual revenue within 10 years, having identified this figure after IBM's lead executive for the business unit said its business plan would clock US$1 billion in revenue a year by 2018.
The tech giant never inked any customer deal in Asia for the cognitive computing technology, making DBS Bank now its first Watson win in the region. Both companies have each dedicated 10 employees to work on the project.
Challenges await Watson
Following the announcement of the new Watson Business Group, Forrester released a statement noting some challenges IBM will face in its attempts to commercialize the cognitive computing technology. The research firm's lead analyst on cognitive computing, Michele Goetz, said: "There are still hurdles such as expense, complexity, information access, coping with ambiguity and context, the supervision of learning, and the implications of suggestions that are unrecognized today. To work, the ecosystem has to be open and communal."
She noted that the vendor will need to focus its investment beyond the platform for applications and devices to deliver on Watson value. The question is whether IBM, along with its partners, can scale Watson from a complex custom tool to become a transformative approach to businesses and way of life, Goetz said.
"IBM is placing big bets and big money on transforming computer interaction from tabulation and programming to deep engagement," she said. "If they succeed, our interaction with technology will truly be personal through interactions and natural conversations that are suggestive and supportive."
In its own report, Technology Business Research said the move to open its Watson APIs (application programming interfaces) and establish partner developer networks will allow IBM to vertically integrate the suite, and demonstrate the cognitive computing technology in real-world use cases.