back to article Regulatory compliance problems? Promontory, my dear Watson

Never mind cancer research or climate change: IBM is finally bringing its Watson AI technology to bear on one of the real challenges still facing human civilisation – regulatory compliance. Big Blue has announced plans to snarf up Promontory Financial Group, a risk management and regulatory compliance consultancy, and combine …

  1. Mage Silver badge
    Coat

    real challenges still facing human civilisation – regulatory compliance.

    No it's not a huge challenge for human civilisation, but for corrupt boards, CEOs, management etc..

    It's a matter of actually reading the regulations and a commitment to meet them. Many companies put huge resource in loopholes and even outright lying and cheating.

    The biggest issues with a computer system are:

    1) Putting the regulations into it correctly.

    2) Correctly inputting your own system to be tested into it.

    3) Having managers etc that don't ignore it.

    Asimov or someone wrote a story highlighting the psychology of it. It's not a technical problem, but a human one. Certainly a searchable computer database and consultancy will help, but I'd predict that Watson AI will make little or no difference to company cultures.

    1. Thomas Whipp

      Re: real challenges still facing human civilisation – regulatory compliance.

      so says someone who clearly has never read a regulatory requirement - while there are some areas of compliance which are very clear cut, there is a lot of it which is littered with principle statements and words like "appropriate".

      by way of example can I direct you to SYSC 13.7 "Systems and Processes"

      https://www.handbook.fca.org.uk/handbook/SYSC/13/7.html

      and in particular 13.7.5 which deals with IT systems.

      I doubt machine learning can deal with those high level requirements that I just referenced, but even at the specific end (e.g. required disclosures for retail sales) it would be extremely hard to write a general case ruleset in a traditional linear logic fashion.

      1. Anonymous Coward
        Anonymous Coward

        Re: real challenges still facing human civilisation – regulatory compliance.

        I doubt machine learning can deal with those high level requirements that I just referenced

        Whilst I'd agree with that view, don't forget that IBM will be selling this as a service. If you're a company operating in a heavily regulated market, you can expect multi-billion fines with some regularity, even if you make a halfway decent attempt at complying. The complexity is too great to avoid breaches, and then you often find that the rules were written by the same people investigating, prosecuting, and judging. And even where they don't often benefit from the fine, they often use this as a metric of their "success" in regulating their sector.

        Against this backdrop, a machine learning approach becomes more attractive - you can do things like (for example) scan all sales calls with VR software looking for patterns and indicator words, or (with enough grunt) an attempt at interepreting the language into its spoken meaning. That's great for IBM - so long as the system can flag up enough convincing cases to investigate, it will be seen as a credible purchase by the client company. From their directors point of view, although the business case will assume the elimination of non-compliance, they will know this is just tokenism that won't catch the worst egresses. But what it offers those directors is a fig leaf to show the regulator. And in most regulatory enforcement models, when you get fined, the size of the fine is greatly affected by things like keeping records, having adequate systems, using systems to find and target fraud and non-compliance etc.

    2. cortland

      Re: real challenges still facing human civilisation – regulatory compliance.

      Called out of retirement, to fix a technical problem in a product, I told my manager that the problem wasn't technical, but structural.

      When there are several competing managers telling one engineer to do three different things before the next day's conference call; when it will take three days to assemble the test equipment, and when they will have changed their minds by the next day anyway; that's not technical at all!

      As the outside expert, I was listened to somewhat more readily than I would have been were I still on the payroll; I told them the objective was to put equipment in the customer's hands and what they kindly let the engineer do that.

      They've yet to call me back again!

  2. James 51 Silver badge

    It wasn't me, my computer made me do it.

    It was my computer that did it your Honour, not me.

    My computer pays my taxes for me, I don't know how much I've paid in the last fifteen years.

    I can see this having a role in profession obfuscation.

  3. allthecoolshortnamesweretaken

    "What happens to staffers once Watson’s training is complete is not touched on."

    In other news, IBM has filed a letter of intent with the SEC to the effect that it will look into the possibility of starting a joint venture with the Soylent Green Corporation.

    1. Ken 16 Silver badge

      Soylent Blue is Auditors!

  4. Ken 16 Silver badge
    Terminator

    If it can auto generate documentation...

    Ideally making it impossible for a human to definitively say whether the enterprise is compliant or not by invoking every possible exception to and alternative reading of the regulations, then the only thing that could beat is is a better AI auditor.

  5. Archtech Silver badge

    First step

    Presumably the first thing Watson will report on will be the vast numbers of regulations which are incompatible, inconsistent, contradictory, redundant, etc. Given that the regulations have been created piecemeal, over a period of years, by separate groups of extremely fallible human beings, they are bound to be riddled with errors. All the more so as the people who drafted the regulations probably had not the slightest inkling that their work would ever be checked by a computer program.

  6. cortland

    So now the humans

    So now the humans will not have to read them.; Goodie they are already ignoring a great many of the, and now they can claim ignorance.

    I spent a few decades working in electromagnetic compliance. What is that? Our electronics is not supposed to interfere with our radio and television; reception and if we have a transmitter our computer is not supposed to shut down whenever wiki the Mike. That is a pretty course reading of things but it is.

    Computers can't make that happen. Computers cannot make manufacturers leave parts out because it is hard to put them in, or to expensive, or are hard to find. Computers cannot make manufacturers perform incoming quality tests on the parts they do buy and statistically valid outgoing tests on products they make. Computers cannot make businesses protect the public from their own products.

    Now, if we could get computers to replace lawyers…

    And that is called paying the Dane-geld;

    But we've proved it again and again,

    That if once you have paid him the Dane-geld

    You never get rid of the Dane.

    -- Kipling

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