IBM's Watson and Thomson Reuters in Regtech Collaboration

AI and regulatory data combine for risk and compliance management at real-time speed

Friday, May 3, 2019

By Jeffrey Kutler


In the latest extension of the Watson artificial intelligence technology for financial industry regulatory compliance, IBM has announced a collaborative offering with Thomson Reuters that aggregates data from thousands of sources to deliver updates and insights with real-time efficiency.

The companies said in a May 1 announcement that they are enhancing a relationship dating back to 2015, now connecting Thomson Reuters Regulatory Intelligence with regtech software capabilities that IBM built over the past two years.

Regulatory Intelligence consists of “industry-leading regulatory insights, news analyses and research, providing compliance professionals in financial services and other industries the tools they need to manage regulatory change and complexity in a single framework,” said Chris Carlstead, head of partnerships and alliances for Thomson Reuters Corporates Segment. “Combining our content with IBM's exceptional AI technology on a platform will dramatically transform the way risk professionals manage their daily compliance burden.”

Alistair Rennie, general manger - Watson Financial Services, IBM, said it is a unique pairing of “platinum standard” data from Thomson Reuters with the premier governance, risk and compliance (GRC) platform that is IBM OpenPages.

“New Level of Insight”

“Combining worldwide regulatory-specific content, AI and advanced analytics, IBM OpenPages with Watson provides visibility into pending regulatory changes to take the guesswork out for compliance professionals. It also helps project what business impact those changes will likely have on the organization,” Rennie said in the announcement. “This regulatory intelligence solution developed with Thomson Reuters brings a new level of insight and intelligence to the complex challenges of regulatory compliance.”

He stressed their desire for it to be “completely trustable by clients.”

The companies aim to simplify the management of “relentless regulatory change,” as Thomson Reuters enterprise alliances lead Andrew Yuille put it - the massive quantities of changes, updates and alerts that have become difficult if not impossible to keep pace with manually, but that still often require human observation and decision-making.

Beyond Cost Reduction

The “global coverage of more than 900 regulatory bodies and 2,500 collections of regulatory and legislative materials” is said to help in the digitization of GRC processes and ultimately bring down compliance costs.

Rennie said in an interview that AI-aided cost reduction is an important objective and benefit. But there are additional “key elements,” including the control framework enabled by the technology, along with trust, transparency across the institution, and real-time insights and “clarity on what they need to comply with.”

IBM said that “by providing a holistic view of risk and regulatory responsibilities, OpenPages helps compliance professionals actively participate in risk management as a part of their day-to-day activity. In addition to integrating Thomson Reuters Regulatory Intelligence, IBM OpenPages with Watson incorporates the expertise of Promontory Financial Group to help users of OpenPages create libraries of relevant regulatory requirements, map them to their internal framework and evaluate their impact to the business.”

IBM acquired the Washington, D.C.‐based consulting firm in 2016 (see With Watson and Promontory, IBM Rolls Out 'Cognitive Regtech'), and last year it announced a “holistic” portfolio and work-flow approach for its assemblage of technologies and expertise (IBM Connects Its AI Dots).


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