In the world of wealth management and financial investments, even the most sophisticated risk management tools aren’t always enough to shield a portfolio from catastrophic losses.

Rob Seidman and Rob Hodgson from IBM Cloud for Financial Services are trying to solve this problem with Investment Insights with Watson, a tool that uses natural language processing and graph database technology to contextualize the impact of news events on investments.

In this episode of the New Builders Podcast, they start by sharing the backstory behind the tool, involving the indictment of a politician who had a large insider stake in a company that a sovereign wealth fund had invested in years prior, and the inability of traditional risk management practices to “stress test” an individual (5:00).

From there, they discuss the limitations of risk management and its tendency to rely exclusively on structured data (7:14), how the graph database embedded in Investment Insights with Watson enables risk managers to determine whether news could impact their portfolio (12:00), their surprise at database integration with IBM Cloudant taking only one day (17:55), and how the market has been “blown away” by the power of the tool (21:30).

To learn more about Investment Insights with Watson, try the starter kit for yourself or watch the tool in action.

You can find new episodes of The New Builders on developerWorks TV and SoundCloud. Find out more about IBM Watson Data Platform at ibm.co/watsondataplatform. Contact host Jim Young on Twitter (@JW_Young) or email (jwyoung@us.ibm.com). The show’s music is provided by School for Robots. Check them out at schoolforrobots.bandcamp.com!


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