IBM buys Promontory Financial Group to give Watson compliance smarts

IBM said Thursday it plans to acquire compliance consulting firm Promontory Financial Group to bring more financial regulatory expertise to Watson's cognitive computing platform.

Promontory is a global consulting operation with an aim of helping banks manage the ever-increasing regulation and risk management requirements in the financial sector.

With that in mind, IBM wants to use the industry expertise of Promontory's workforce -- which is made up of ex-regulators and banking executives -- to teach Watson all about regulation, risk and compliance.

IBM is also using the deal to create a new subsidiary called Watson Financial Services, which will build cognitive tools for things things like tracking regulatory obligations, financial risk modeling, surveillance, anti-money laundering detection systems.

"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," IBM said in a press release.

Founded in 2001 by former US Currency Comptroller Eugene Ludwig, Promontory came out as one of top financial consulting firms banks turned to after the global financial crisis of 2008.