Interview with David Kenny, GM @IBM Watson, on AI, Blockchain and Design Thinking in banking
A few weeks ago, at Viva Tech’s International Summit in Paris, I bumped into David Kenny – one of my heroes. I will tell you why: David is a man with an entrepreneurial mindset who has deserved every bit of success that he has achieved. Currently, he is General Manager of #IBM Watson tasked to build Watson into “artificial intelligence as a service”.
I have been following David’s career since he was CEO of Digitas, a very successful digital media company acquired by Publicis Group in 2006 for $1.3 billion. At that period, I was running a small digital media company called Art House Media and, therefore, all of their moves were of great interest to me.
After that David moved to other demanding positions, but he is probably best known as Chairman and Chief Executive Officer of The Weather Company. I, on the other hand, moved into the financial services sector.
The Weather Company was acquired by IBM for more than $2 billion at the beginning of this year, and that’s when David was transferred to IBM’s Watson team.
The reason why I told you this story is to emphasise that running a marketing and #technology agency that was helping businesses adapt to the digital age, with more data and more analytics, 10-15 years ago; as well as more recently connecting hundreds of millions of sensors to produce more than 20 terabytes of data daily for The Weather Company’s apps and websites, definitely required a clear vision of the future driven by digitisation and innovative technologies.
So, what did we talk about?
Since I work for one of the big European #banks, our discussion started with three early things AI can be used for in the financial services industry.
The first area is understanding data and rules, something Watson is really good at. When dealing with compliance, fraud detection, money laundering and all other processes commonly known as KYC, Watson is capable of looking at all the data in the public about each customer in a very private and secure way. Essentially, that ensures that banks fully respond to their responsibility of knowing everything they need to know about each customer.
David also mentioned that Watson was learning about #banking regulations and laws in different countries to help global banks deal with the compliance issue. Especially nowadays with Brexit, there is a new problem: Do you know that there are 10,000 rules between EU and Britain in banking? Well, Watson too needs to learn all these rules!
David then moved on to the second area: customer connection, that is, the ability to use AI for managing text messages and Twitter accounts. In that way, Watson becomes a virtual agent that enormously helps the customer service agents by supplementing them.
The third is predictive models. Banks need to predict what the customer might need next and what information they might find useful. This is about personalisation – but with structured data. With Watson, it is possible to process so much more data; find out what is happening in someone’s business, in their environment, in their economy, in their life – so that banks can be ready to help them.
Inevitably, our next topic was #blockchain. David told me that IBM had invested literally billions of dollars in research. They think that blockchain is really an important technology since it enables us to keep track of absolutely every transaction – banks in particular need to know that data or currency is in the right hands. Another advantage is that the sender and the receiver can be verified at an enormous scale!
IBM thinks that blockchain needs to be baked into all of the Watson systems we have mentioned here because they do not do AI from search – which is very much about public knowledge. They are Watson for private data and, thus, need blockchain to make sure the data stays private and is only exchanged and secured by the right person on the other side.
Please note that IBM donated all of their blockchain technology to the Linux foundation because they want it to be an open source and they want everyone to use it. The aim is to make data more useful so that AI can work on private data, rather than just on the data available in the public search grid.
And, why is data so paramount? For two reasons. Firstly, the higher the quality of the data, the better AI algorithm results are. Secondly, that, in turn, helps us make much better decisions. Therefore, the data banks possess provides true competitive advantage!
I learned that 80% of the world’s data was held within companies and organisations! Only 20% is stored on the Internet. Did you know that?
Can you see now how we can improve our business significantly by employing new AI technologies to access data from all three: proprietary, third-party and public sources?
Of course, I could not let David go without asking him about his view on design thinking. In my previous post “How to ignite creativity and flair for innovation?”, I talked about a large-scale transformation IBM had undertaken to replace the company’s engineering and sales culture with the innovation mindset by bringing in design thinking.
David revealed to me that he himself was also a great believer in design thinking, and explained that it was the belief of Ginni Rometti that we were moving to a world in technology that was no longer B2B, but rather B2I (business-to-individual), that led to IBM’s transformation.
All this is highly relevant to us in the financial services sector as well, but I will leave if for one of my future posts. In the meantime, think of B2I as marketing on the individual level. The philosophy behind it is that companies should better tailor not just their products, services and go-to market strategies, but also their whole business models to the individual buyers’ wants and needs due to the rapidly shifting digital market and buyer behaviour.
David said that it was already possible to see that new approach in how they were working with Watson. Today at IBM, they actually start every project with design thinking to make sure they know the persona of the user and that their technology fits the user’s life.
They begin the design thinking process with the following questions: “How are our clients using the product? How is their day spent? What is the right way to connect with them? What is the right content to connect with them?”
As a result, as David pointed out, although their main task is to show how AI can help their clients, they are also making sure that technology itself is not a barrier, that they are communicating in a normal language, that it is easy to find the next thing and that they are not overwhelming people with too much information.
Thanks to design thinking, in Watson’s case, they took into consideration the end user – the retail customer; the decision maker; and the growing group of developers. Since the banks are increasingly bringing in tech people to work on machine learning, IBM made Watson easier for them. All they have to do is just take an API and use it. As straightforward as plug-and-play!
At the end, I asked David to tell me what he thought about the use of design thinking in banking. Without hesitation, David stated that design thinking was actually essential! Then he explained it further: “The banks are built on trust. Your reputation is very trustworthy. Trust will grow if you bring it all together – if you look for business solutions from various perspectives, empathise with users, and address various stakeholders. Design thinking is used to build trust.” – What a fine answer!
[linkedinbadge URL=”https://www.linkedin.com/in/deandemellweek” connections=”off” mode=”icon” liname=”Dean Demelweek”] is Agent of Change & Innovation Catalyst | Tech London Advocate and this post was originally published on linkedin.
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