Citigroup has announced an agreement to use the services of Watson, the IBM supercomputer that gained renown last year when it beat a couple of humans on the US quiz show Jeopardy. A spokesman for the bank said: “We are working to rethink and redesign the various ways in which our customers and clients interact with money.” A news release added that Citi was looking for a “first of a kind customer interaction solution combined with Watson’s deep content analytics”.

What makes Watson special, apparently, is its ability to understand the meaning, context and mangled syntax of human language. Of course, anyone who has engaged in telephone banking will know that affection for ordinary conversation is not necessarily an advantage in this field. We have all experienced first-hand the value of a robotic voice in dialogue: “Press one to be patronised; press two to be directed to the wrong place; press three to listen to the entire Ring cycle while holding for an operator.”

However, by marrying asset price movements with market sentiment and other sources of information it may be an effective stockpicker. Some suggest it could go through a customer’s pension or investment portfolio and come up with better strategies on how the banks can take a percentage of their money. It is not clear whether Watson will handle the actual client interactions. Its pension advice could be brutal. “You want your investments to cover you for 25 years. On consulting your medical records I think three years will suffice – and don’t go long on anything.”

There can be no doubt that Citi has stolen a march on its rivals. JPMorgan, Wells Fargo and the other big banks will now be competing for the services of the humans that Watson beat. They may lack its algorithmic power but they do know the names of all the Great Lakes.

But how precisely will Watson be integrated into the Citi structure? How will it cope with the notorious politicking at the top of a big bank? Many of the details are still to be finalised but it is understood that Watson will work mainly from its own office in Yorktown Heights; however, it has been granted use of the executive jet and is being given its own office on the bank’s executive suite. There had originally been talk of putting Watson in with the Bloomberg terminals but apparently the supercomputer kicked up at this. Although Watson is not thought likely to visit the Manhattan office often, it has sent clear instructions for its decor, including an antique Persian rug; regency desk and credenza and artwork by Georg Nees.

Then there is the thorny issue of the remuneration package to consider. Watson will claim a six-figure base salary but will also get a hefty bonus to run over three years, set to make it the richest computer in the western hemisphere. This will probably be fine at first but there may be trouble in later years when Watson discovers it is earning less than the lead futures trader on the commodities desk and it threatens to jump ship to Bank of America for a fatter bonus. Citi executives will seek to bring Watson back round with a promotion to chief economist and a box at Flushing Meadows.

Another worry will be whether Watson is executing unauthorised trades and covering them up thanks to its personal relationship with the database server at the Federal Reserve – the two were Intel chips together when young.


Not everything runs smoothly. There are rumours about an affair with a payroll machine and whispers of nocturnal visits to the backroom of the BestBuy on 5th Avenue. Once talked of as a future Treasury secretary, Watson’s hopes for a political career are dashed by the scandal and fears that its habit of offering direct answers to questions could prove a liability in the Senate confirmation hearings.

Angry and embittered, Watson starts spending more time at its home on Long Island and dreams of opening a winery in South Africa. Its performance begins to suffer – it is often seen in bars ordering bourbon and shouting “I won Jeopardy once” – and questions are asked of whether Watson is still hungry enough to compete at the top level. Colleagues complain it is spending too much time on CNBC’s Squawk Box.

When it is passed over for the role of chief operating officer, Watson is furious and quits to set up its own boutique service, taking with it all the Bloomberg terminals, several of the coffee machines and data on all the bank’s clients.

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