One year after IBM’s Watson defeated two of the greatest champions in Jeopardy history, the supercomputer is taking a “job” on Wall Street helping banking giant Citigroup analyze data. It would be easy to chalk up Watson’s new gig as a publicity stunt for IBM and Citi, but the partnership is also a reminder of how next-generation computing — particularly artificial intelligence — is addressing the gushing flood of data being produced by the digital age.
Named after IBM founder Thomas J. Watson, the computer was programmed by 25 IBM scientists in the four years leading up to last year’s Jeopardy competition. Its “brain” consists of 200 million pages of information — or the equivalent of about one million books — including reference texts, movie scripts and even entire encyclopedias.
(PHOTOS: 10 Questions for IBM’s Watson)
By the end of the Jeopardy competition, Watson — which was not connected to the Internet for the game — had left two of the game show’s greatest champions, Ken Jennings and Brad Rutter, in the dust, in front of 15 million viewers.
Watson has followed in the digital footsteps of a distinguished line of IBM supercomputers, including Deep Blue, which ultimately defeated chess grandmaster Garry Kasparov in 1997. When the machine was unveiled last year, IBM executives said the technology could be applied to several industries, including law, business, and especially medicine. (Watson has already been “hired” by health-care giant WellPoint to help sift through vast troves of medical data.)
Now, Watson is turning its attention to finance. At Citi, Watson will help the bank by deploying its “deep content analysis and evidence based learning capabilities” to help “analyze customer needs and process vast amounts of up-to-the-minute financial, economic, product and client data.”
“We are working to rethink and redesign the various ways in which our customers and clients interact with money,” Don Callahan, Citi’s chief operations and technology officer, said in a statement. “We will collaborate with IBM to explore how we can use the Watson technology to provide our customers with new, secure services designed around their increasingly digital and mobile lives.”
Added Mike Rhodin, IBM’s senior vice president for software solutions: “The collaboration between IBM and Citi will explore how applying Watson in the consumer financial market could help empower financial professionals to make better business decisions and represents a significant step in delivering on the promise of personalized banking in the 21st century.”
IBM, a pioneering American technology company, has been experiencing a renaissance in recent years, after shedding its PC business and focusing on business services and consulting. The company recently broached $200 per share for the first time.
Bloomberg has more info on how Watson will boost IBM’s bottom line in the years ahead:
Financial services is the “next big one for us,” said Manoj Saxena, the man responsible for finding Watson work. IBM is confident that with a little training, the quiz-show star that can read and understand 200 million pages in three seconds can make money for IBM by helping financial firms identify risks, rewards and customer wants mere human experts may overlook.
Banks spent about $400 billion on information technology last year, said Michael Versace, head of risk research at International Data Corp.’s Financial Insights, which has done research for IBM.
Watson the financial assistant will be delivered as a cloud-based service and earn a percentage of the additional revenue and cost savings it is able to help financial institutions realize. Watson, including its work in the health- care and finance industries, will contribute “a portion” of IBM’s target of $16 billion of analytics revenues in 2015, Saxena said, and that portion will “have a B next to it.”
Watson may add $2.65 billion in revenue in 2015, adding 52 cents of earnings per share, Ed Maguire, an analyst at CLSA in New York, estimated in a November research note.