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IBM continues to expand use cases for its Watson cognitive computing system, introducing Watson to professional services and the travel and hospitality industries.
Big Blue this week announced a partnership with KPMG, a tax, audit and advisory firm, to use Watson on KPMG’s professional services offerings, including auditing services. On its own, KPMG had already joined the “cognitive era,” which IBM CEO Ginni Rometty calls the present-day IT environment, where systems have begun to “think” for themselves. Indeed, KPMG has implemented several projects that tap into cognitive technologies.
For instance, KPMG has developed a secure, online due diligence platform called Astrus, which harvests and analyzes vast amounts of data to identify integrity and reputational risk issues on third parties around the world, Steve Hill, U.S. head of innovation at KPMG, told eWEEK.
“The insights we’re deriving from Astrus technologies are built on top of IBM Watson and have made us more efficient and are improving every day,” Hill said. “IBM Watson technologies improve the quality of insights and reduce the amount of time we need to spend in primary research. In just a matter of minutes, analysts have access to material that helps them delve more deeply and effectively into analysis of a subject.”
More recently, KPMG engaged IBM Watson to build a prototype of how to use cognitive technologies in auditing a financial institution’s various credit rating processes, Hill added.
“As part of that program, the IBM Watson tool will ingest large quantities of credit file materials and be taught to make judgments that will augment our auditors’ ability to test our clients’ controls around credit risk,” he said. “Watson technology will allow application of the judgments to a much larger portfolio of credit files than we ever could perform manually, and will deliver a list of exceptions on which we can follow up. The results have been very impressive, which lead us to a large scale adoption.”
“The cognitive era has arrived,” said Lynne Doughtie, KPMG chairman and CEO, in a statement. “KPMG’s use of IBM Watson technology will help advance our team’s ability to analyze and act on the core financial and operational data so central to the health of organizations and the capital markets.”
KPMG’s alliance with IBM is the audit firm’s oldest alliance, dating back 10 years. Together, the companies have collaborated on hundreds of engagements with many of the world’s leading businesses. This new relationship with IBM Watson builds on the ongoing collaboration and is a critical step forward in KPMG’s cognitive technology journey, Hill said.
Cognitive systems like Watson provide a natural language interface between humans and machines, so users can directly query the system in natural language, be understood and get responses based on insight gleaned from massive amounts of data the system has ingested and analyzed.
“A lot of accounting services, including audit, tax, advisory leverage what are sometimes called ‘judgment-driven’ processes,” said Charles King, principal analyst at Pund-IT. “Meaning they rely on the experience and judgment of individuals to provide accurate guidance. But financial professionals are under the same ‘bandwidth’ challenges as the rest of us who deal with ever growing volumes of increasingly complex information.”
However, digging through and making sense of complex data is what Watson is made for, King noted.
“Plus, the platform’s natural language interface should make it a great fit for those whose professional skills outweigh their IT abilities,” he said. “Keeping Watson in-house could certainly provide value to IBM in terms of competitive superiority and market positioning. But the platform is likely to drive far more revenues as the engine or brain beneath a growing range of service offerings, including the ones envisioned by KPMG.”
IBM Teams With KPMG, Hilton to Advance Watson
John Kelly, IBM senior vice president of cognitive solutions and IBM Research, noted that auditing and knowledge services require the analysis of large amounts of unstructured data, at which Watson excels.
“IBM Watson is a highly regarded innovator and recognized leader in cognitive technology,” Hill said. “We’ve seen in many industries how organizations are harnessing the transformative power of cognitive computing, helping professionals do their jobs better, and solve important challenges. KPMG and IBM both believe the impact of cognitive technology on professionals services has the potential to be equally if not more profound. Both firms are also interested in mission-based transformation that drives meaningful impact on a significant scale. For our partnership, this means reinforcing confidence in capital markets.”
Ed Harbour, vice president of IBM Watson, told eWEEK that KPMG auditors are working to apply Watson to the sampling process. Right now in the course of a typical audit, auditors examine a small subset of transactions—these act as a window into a company’s overall state of business, but may miss key indicators or outliers that could be uncovered if auditors had the ability to review a larger number of transactions.
“IBM’s view is that given more data, people can make better-informed decisions,” Harbour said. “Bringing Watson into the audit process can allow for a much larger sample, giving auditors a more complete view into an organization’s overall health. Leveraging cognitive technology also will help to expedite the audit process, more quickly identifying issues that could be addressed early, and allowing auditors to focus on higher value activities, including offering additional insights around risks and other related findings.”
Hill said although KPMG and IBM are making this announcement during the height of the tax season, the timing of the news is coincidental.
“However, we are in the early stages of building a ‘cognitive ecosystem’ that will continue to evolve and include highly advanced technologies developed within and outside of the firm. IBM Watson is a key component to that ecosystem and signifies the first step our firm is taking toward augmenting the services we currently perform, enhance the quality and effectiveness of our work, drive more value to our clients and advance into areas where we don’t currently play.”
In other Watson news, IBM this week announced it is working with the Hilton hotel chain to pilot “Connie,” a hotel concierge robot powered by IBM Watson and Watson Ecosystem partner WayBlazer—which offers a cognitive travel platform based on Watson. The robot is being tested at the Hilton McLean in Northern Virginia’s Washington, D.C., suburban area. Connie draws on domain knowledge from Watson and WayBlazer to provide concierge information such as recommendations on local tourism and dining.
Named after Conrad Hilton, Connie uses a combination of Watson APIs—Dialog, Speech to Text, Text to Speech and Natural Language Classifier—along with WayBlazer’s extensive travel domain knowledge to interact with guests.
“We’re focused on reimagining the entire travel experience to make it smarter, easier and more enjoyable for guests,” said Jonathan Wilson, vice president of product innovation and brand services at Hilton Worldwide, in a statement. “By tapping into innovative partners like IBM Watson, we’re wowing our guests in the most unpredictable ways.”