WASHINGTON — IBM has agreed to buy Promontory Financial Group — a consultancy so influential it has been dubbed the industry's "shadow regulator" — in a move that could extend artificial intelligence into every aspect of banking.

Under the deal, which was announced Thursday, Promontory's stable of ex-regulators and former industry executives will be tasked with teaching IBM's Watson to address risk management and compliance issues at banks. The goal is to create an AI capable of sifting through reams of data collected by banks to find potential problems and suggest solutions.

"We can very quickly help financial institutions have a much more complete and continuously updated view of what the landscape is," Alistair Rennie, a general manager for industry solutions at IBM, said in an interview. "There are systems now that throw out alerts all the time. The work of going through which ones need follow-up and documentation is very manual and very inefficient. We believe we can absolutely solve that problem with a cognitive solution. We can make it far more effective, far more automated."

Gene Ludwig, the founder and chief executive of Promontory, said the deal will ultimately produce a system that can help banks of all sizes manage the massive compliance load facing them. While it's already clear big banks would be interested in such a system, he said the reach goes well beyond the larger institutions.

"For community and regional banks, this is a potential lifeline," Ludwig said in an interview. For many banks, it is an "enormous burden just to keep up. Watson offers the opportunity to have a world-class partner."

Rennie added that the system can be scalable.

"We will make this affordable," he said. "We expect this to be highly consumable for institutions of all different sizes."

IBM's Watson, an AI program that can "read" large volumes of documents to absorb knowledge, is already used in the health care industry and is present within the banking system. Citigroup began using the technology in 2012 to analyze customer needs and process client data. A few other banks have followed suit, using Watson to help in wealth management.

But that mostly focuses on the customer-facing side of the equation, while the Promontory deal would focus Watson on helping banks deal with the massive amounts of regulations they face. IBM said it would call the result Watson Financial Services.

Rennie estimated that banks spend roughly $270 billion a year on compliance. IBM wanted to acquire Promontory for its knowledge of the regulatory system, in order to bring Watson up to speed on issues like anti-money-laundering and stress tests.

"There is no better expertise in the world in this area, no more unique set of people than Promontory," Rennie said. "We want to be able to move quickly, we want to be able to move in an integrated way. We want to be able to offer a complete solution. This is a huge problem."

He said IBM plans to "scale the expertise of Promontory in a very unique way."

"We can have a system that can constantly ingest regulatory information and work through reasoning and learning how best to apply that as a compliance framework," he said.

Financial terms of the deal were not disclosed; Promontory would operate as a wholly owned subsidiary and would continue to do its present work with banking clients around the globe. Ludwig would continue to be Promontory's CEO. The deal is subject to regulatory approval. A separate company that Ludwig co-founded, Promontory Interfinancial Network, is not involved in the transaction.

Ludwig said the deal was attractive because it will create a system that can go beyond what's available now. He noted that banks are grappling with massive amounts of unstructured data.

"In order for financial institutions to deal with the risk management and compliance problems, you need not just the main expertise, you need superior technological solutions," Ludwig said.

Asked whether Watson could one day put compliance experts like Promontory out of business, Ludwig, a former comptroller of the currency, said there will likely always be a need for people who understand the "nuance" of government regulations.

Rennie noted that the regulatory system is always changing.

"I can't imagine a world in which the regulatory environment is at rest," he said. "We will find places we mature very quickly. But we expect this will be an ongoing relationship."

The deal marks a convergence between two of the biggest challenges in banking: mounting regulation and technological transformation.

"If you look at the large issues that our financial clients face, regulatory compliance is at the top of the list," Rennie said. "It is a boardroom issue. It is an issue that is becoming more complex and more extensive. We think it is a fundamental problem that is worthy of a major investment to make a function change in how it gets solved."