HANDOUTS · Integrate bots into messaging channels, mobile, web, robots etc. Incorporate deep...
Transcript of HANDOUTS · Integrate bots into messaging channels, mobile, web, robots etc. Incorporate deep...
OPERATIONS & TECHNOLOGY CONFERENCE & EXHIBITION • SEPTEMBER 11-13, 2017 • THE WESTIN CHARLOTTE • CHARLOTTE, NCOperations & Technology Conference and ExhibitionThe Future is Here: Do You Have the Tools Necessary?
September 11–13, 2017 The Westin Charlotte Charlotte, North Carolina
HANDOUTS
What is Cognitive Computing? & What are Financial Services Firms Doing With It?
Wes HelmsWatson Financial Services Solutions
Games Provide a Laboratory for Reasoning
Technology forces…
Cognitive & Analytics CloudFinTechs & Digital
…are creating new experiences…
Experience journey Digital ubiquity Omnichannel
…and disrupting operational models.
Traditional value chain Ecosystem
Robotics & AutomationBlockchain
Technology is driving the evolution and creation of new business models in Financial Services
SecurityInternet of Things
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The digital explosion of content makes it impossible for humans to make sense of it all
TODAY
STRUCTUREDDATA
UNSTRUCTUREDDATA
Cognitive is the newcompetitive advantage.
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AI = Augmented Intelligence
Cognitive computing is about amplifying human cognition.
Cognitive systems are not programmed. They learn their
behavior through training.
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Cognitive systems are creating a new partnership between humans and technology
Humans excel at:common sense (but with many biases), morals, imagination, compassion, dilemmas, abstraction, dreaming, generalization, expertise
Cognitive systems excel at:Locating knowledge, natural language, pattern identification machine learning, eliminating biases, providing endless capacity
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What are some problems that a cognitive businessis ideally suited to solve?
How to keep up with the mountains of contextual data available to you, even when most of it is unstructured in format
Data
Complexity
Volatility
How to overcome and solve for great complexity by giving the skill and knowledge of the informed few to the empowered many
How to keep up with the mountains of contextual data available to you, even
when most of it is unstructured in format
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A cognitive business has systems that can enhance digital intelligenceexponentially.
They can reason, grasp underlying concepts, form hypotheses, and infer and extract ideas.
Understand Reason
Learn Interact
Cognitive systems understand imagery, language and other unstructured data like humans do
With abilities to see, talk and hear, cognitive systems interact with humans in a natural way.
With each data point, interaction and outcome, they develop and sharpen expertise, so they never stop learning.
Descriptive Analytics
Prescriptive Analytics
Predictive Analytics
What happened?
What exactly is the
problem?
How many, how often,
where?
What actions are needed?
How can achieve the
best outcome and address variability? Stochastic
Optimization
How can we achieve the
best outcome?
Optimization
What if these trends
continue? Forecasting
What could happen?
Simulation
What will happen next if? Predictive
Modelling
Analytics Sophistication
Analytics is evolving in sophistication to now encompass Cognitive
Artificial IntelligenceA branch of computer science dealing with the simulation
of intelligent behavior in computers
Cognitive
Machine LearningThe study and construction of algorithms that can learn from and make predictions on data
Deep LearningA branch of machine learning based on a set of algorithms that model multiple layers of
neural networks
Some common AI concepts:Natural Language Processing (NLP) is a core function for parsing and identifying significant words in language
• Uses Annotators to identify significant words• Increasingly used to extract Entities and Relationships into
Knowledge Graphs• Often rule-based, but a growing focus on statistical techniques
Machine Learning is a class of statistical techniques that use training data to recognize the correlation between a set of feature patterns and outcomes
• Enables the prediction of other similar outcomes given a similar pattern of feature values
• Often associated with the problem of identifying the weak signals in the noise that indicate meaningful patterns
Cognitive Systems leverage machine learning to predict meaning in features of human language (spoken, written, visual) and related forms of human reasoning
• Reasoning strategies often employ high-dimensional feature spaces
• A lot of work goes in to identifying and refining appropriate features
Deep Learning is a rapidly maturing space, based on neural network techniques, that are taught to find their own features
• Generally very high dimensional, fed with an arbitrarily high number of primitive signals and left to sort itself out through training data and reinforcement
Artificial Intelligence the theory and development of computer systems able to perform tasks that normally require human intelligence, such as visual perception, speech recognition, decision-making, and translation between languages.
• Reasoning, Knowledge, Planning, Learning, NLP (communication), perception and the ability to move and manipulate objects
• Machine mimics "cognitive" functions that humans associate with other human minds, such as "learning" and "problem solving
IBM’s Principles for the Cognitive Era
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Purpose
• Augment human intelligence
• Based not only on principle, but also on science
• Embedded in the processes, systems, products and services by which business and society function – all of which will and should remain within human control
Transparency
• When and for what purpose AI is applied in cognitive solutions
• The major sources of data that inform solutions and the methods to train
• Work with our clients to protect their data and insights, and encourage others to do the same
Skills
• Work to help people acquire skills and knowledge to engage with cognitive systems
• For new work and jobs that will emerge in the cognitive economy
Watson has become a set of Cognitive services available on IBM Bluemix for clients to enable in their apps
Personality Insights
Alchemy Language
Conversation DocumentConversion
Language Translator
Natural Language Classifier
Retrieve & Rank
Tone Analyzer
Language
Speech to Text
Text to Speech
Speech
Visual Recognition
Vision
Tradeoff Analytics
Alchemy Data News
Data Insights
Create natural language interactions with the customer, including Q&A and onboarding.
Walk customers through business processes, e.g. application forms or resetting a password.
Enhance your app with complementary Watson APIs for Empathy and Speech to give it more human-like qualities.
Deploy wherever you want. Integrate bots into messaging channels, mobile, web, robots etc.
Incorporate deep learning and advanced machine learning capabilities with minimal expertise or coding.
Watson Conversation
Watson Virtual Agent - Pre-built content out-of-the-box, pre-trained for customer self-service.
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Watson provides tools to enable custom business domains
What is the rust grade?
”Sounds like …”
Company namesProduct namesMedical termsDrug namesIndustry terms
… and more
CognitiveCustomer Care
• Personalize every interaction
• Conduct conversations
• Provide assurance
Watson Financial Services SolutionsRadically improving client processes with three levels of value & business models
Solutions-as-a-ServiceIndustry Solutions
Developer workbench, micro-servicesDevelopment Marketplace
Process Clouds Business Process as-a-Service
Risk & Compliance
CounterFraud
Client Insight & Engagement
$Payments
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OUR PEOPLE & PROCESS
YOURDATA
WATSON WITH
SHARED MODELS
& LEARNING
OUR SYSTEMS
OUR SYSTEMS
SHAREDDATA
YOUR DATAYOUR
DATA
OUR SYSTEMS
WATSON WITH
INDEPENDENT MODELS & LEARNING
WATSON WITH SHARED
MODELS & LEARNING
OUR PEOPLE & PROCESS
OUR PEOPLE & PROCESS
Industry Platforms will provide an opportunity to reduce costs, while improving effectiveness and accuracyTODAY
$ $ $ $ $$ $ $ $ $
$ $ $ $ $$ $ $ $ $
1OUR
PEOPLE & PROCESS
YOUR DATA
YOUR SYSTEMS
$ $ $ $ $$ $ $ $ $
$ $ $ $ $$ $ $ $ $
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Generating Insight
COGNITIVE SERVICESTailored News and Alerts
Email Tone AnalyzerPsychographic Personality Insights
CHURN PROPENSITY ANALYSIS
Total Customer ChurnHoldings Churn
PRODUCT / UPSELL PROPENSITY
Credit CardInvestment Theme AffinityWealth Services Affinity
BEHAVIOR-BASED SEGMENTATION
Dynamic Client Segments Using Interactions and Behaviors
LIFE EVENT PREDICTION
BabyMarriage
RelocationJob ChangeRetirement© 2017 International Business Machines Corporation - CONFIDENTIAL
Insight use cases using pre developed analytics models
CASHFLOW ANALYSIS & FINANCIAL EVENT PREDICTION
OverdraftLarge Deposit
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• Identifies attrition risk, potential life events and product propensities
• Indicates reasoning and recommendations
• Client psychographic profile and insights • Prioritized news based on portfolio
Client Insights for Wealth Management provides every FA with a Predictive, Prescriptive, Cognitive Assistant
Client Attrition: Ability to predict client attrition 30 days ahead of time to protect revenue and wallet share, while also building profound client loyalty
Dynamic Segmentation: Advanced dynamic client segmentation helps identify unique cohorts of clients by behaviors, account profile information, and demographics
Life Event Prediction: Predict life events impacting client’s financial lives to help advisors proactively service a client’s needs
Product Propensities and Investment theme Affinity: More effectively run campaigns by identifying client product propensities, investment theme affinities, and life events – driving new business opportunities
Cognitive Assist: Watson-powered summarized news on portfolio, client interests, sentiment on client communications, client psychographic profile
Feedback Mechanism: Machine learning technology trains, learns, and adapts to your clients and their data
API-Driven: Consumable via APIs to embed insight components in your existing front office platform
A Salesforce Wealth Management Offering that leverages Components of IBM’s Watson Client Insight for Wealth Management
Managing Risk and Compliance
Opportunities to Improve Regulatory Compliance with Cognitive
Regulatory Change Management
Know YourCustomer
Anti-MoneyLaundering
Misconduct Surveillance
Address constantly changing regulations and manage control requirements more effectively
Streamline customer due diligence and remediation activities
Enable more effective identification and investigation of suspicious transactions
Identify potential misconduct more effectively
35©Copyright Promontory Financial Group, an IBM Company. All rights reserved.
Examples of manual or semi-manual processes include the following:
Credit Processes Currently Require Significant Manual Processes
Process Type of Data Description
Reviewing Prospectuses for 40 Act (1940 Investment Companies Act) Mutual Funds
Unstructured
For example, Fidelity will allocate trades to the 100+ mutual funds. Each fund prospectus must be read to determine key data, Assets under Management, Permitted Investments, Investment strategy.
Collecting monthly Net Asset Values (NAVs) for Hedge funds Unstructured
Monthly NAV data from hedge funds is delivered in multiple forms, emails, PDFs, web sites, etc. and is typically aggregated each month by strategy and force ranked by performance.
Checking for compliance with covenants in ISDA or other Master Netting Agreements
UnstructuredMaintenance covenants are included to the Schedule to the ISDA (i.e. minimum, NAV, permitted % decline in performance). These need to be compared to the NAVs collected above.
Checking for compliance with key terms and conditions/covenants in commercial Loan Agreements
UnstructuredSimilar to above. Credit analysts extract key terms and covenants from loan agreement to include in the Credit Application and for on-going monitoring.
Regulatory Guidance requires an independent review of third party real estate appraisals
UnstructuredAppraisals are typically received in PDF or similar. Extracting data is a cut & paste effort. Also, capturing market data across appraisals would be a useful database.
Reviewing Focus Reports for Regulated Broker-Dealers Structured
Focus reports are highly structured reports – and are not publically available. Credit analysis extract (copy & paste) data from Focus reports into Credit Memos.
Reviewing Call Reports for Regulated Depository institutions
Structured Call Reports are very structured. Other vendors (SNL) provide extracts of Call Report data to subscribers.
Surveillance Insight for Financial Services
Holistic and cognitive insights to detect, profile and prioritize complex financial
crime scenarios
Integrates insights from transaction, electronic communication, social media & voice data
detects anomaly sequences from multiple sources
scales to billions of events with near real-time alerts
H o l i s t i cS u r ve i l l a n c e
Hol i s t i cSurve i l l ance
Cognit iveReasoning
Intu i t iveVisual izat ion
effective visualanalytics
monitoring and replay capabilities
H o l i s t i cS u r ve i l l a n c e
C o g n i t i veR e a s o n i n greasons withcontinuouslyupdated datamodels
remembers long-term observations over time
analyzes sentiments, semantics, & behaviors
Fuse insights to detect suspicious activities
View linkages with instant drill-down & playbacks Build employee profiles with personality & behavior traits See alerts & investigationsfrom continuously updated risk models
OrderTrade
ExecutionReference
NewsSocial
EmailChat
Voice
Reduced cost of employee non-compliance & misconduct
Faster detection of sophisticated scenarios
Risk based prioritization of alerts and reduced false positives
Transactions
Communications
External
Surveillance
Trader Profiling to not only protect against risk but to identify best practice and opportunities for
growth
Surveillance Insights for Financial Services
Watson for Legal in FSS – Outside Counsel Insights
PerformanceDashboard
Outlier and segmentanalysis
Invoice drilldownand anomaly detection
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