In October 2016, International Business Machines (IBM) announced that it would acquire Promontory Financial Group, a financial consulting firm specialized in financial regulation and compliance. The financial details of the deal have not been disclosed. Through this acquisition, IBM plans to integrate Promontory’s expertise in compliance with Watson’s cognitive computing technology in order to help IBM’s financial clients reduce their compliance costs.
In the past few years, financial services companies have had a difficult time keeping up with new regulation. The annual volume of regulatory changes went up by 492% from 2008 to 2015, according to data from Thomson Reuters.1 As there are more changes in the financial services industry and the rules get more complex, the costs of compliance have risen significantly. Some of the world’s biggest banks have spent a significant amount of money on compliance (see table below).2