What I learned at IBM’s Watson for Financial Services briefing

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20 January 2015
Daniel Latimore
Last week I attended an IBM Watson briefing geared toward Financial Institutions at Watson HQ on Astor Place in Silicon Alley. The event was oversubscribed, a testament to FIs’ interest in Watson. I learned three things.
  1. Implementing Watson is hard. IBM had a panel of three financial services firms (Nationwide (the US mutual), USAA, and Monitise). Of the three, USAA is farthest along, and is to be commended for experimenting with Watson, but there’s no getting around the fact that there’s no such thing as a turn-key Watson implementation right now. Ingesting the data to train Watson is, as they say, non-trivial, and then honing how agents can use it to augment their customer interactions takes time and persistence. Companies preparing to embark on a Watson journey should understand that it likely will take more than a single budget cycle to realize results.
  2. Negligent tugboat captains have something to teach banks. Bear with me here: in 1932, Judge Learned Hand found that a tugboat company towing a barge that sank in bad weather was liable because it did not use readily available technology. His opinion stated, in part, “Indeed in most cases reasonable prudence is in fact common prudence, but strictly it is never its measure. A whole calling may have unduly lagged in the adoption of new and available devices. . . . Courts must in the end say what is required. There are precautions so imperative that even their universal disregard will not excuse their omission.” This certainly seems to have some interesting implications for bank operations, even if Watson doesn’t quite meet the standard yet of “readily available technology.” (For more information on the case, see this itlaw wiki.
  3. Moving to pay for purchases, rather than pay for eyeballs / impressions, is getting closer every day. Alastair Lukies, the CEO of Monitise, had a very compelling vision of the future of payments, particularly with respect to mobility. One insight: the days of retailers or other sellers paying advertisers for impressions are dying more quickly than many thought. They’ll be replaced by paying for a referral only when a sale is actually made. The technology to track this accurately exists now, and banks who embrace the ecosystem approach will reap the benefits. For Celent’s take on Merchant Funded Rewards, see Using Data to Create Value for all Customers, by Zil Bareisis.
Speaking of commerce, I also saw, at a different conference hosted by the Electronics Transaction Association, a great discussion of Allure (the women’s lifestyle brand) using MasterCard’s ShopThis to let consumers almost seamlessly buy items they see featured in Allure’s editorial content. They can click on a lipstick they like from one retailer, and a scarf from another, and both will be placed in a single shopping cart. MasterCard takes care of the (substantial) back-end heavy lifting to make the consumer’s experience incredibly simple.

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