Ignorance Isn’t Bliss: The Artificial Intelligence Response to our New Digital Reality
Feb 20, 2019
The Mighty Bamboo
The mighty bamboo, when planted, doesn’t display any growth in the first four years, in spite of constant nurturing with water, fertile soil and sunlight. In the fifth year, the plant offers a pleasant surprise - a growth spurt of up to 80 feet in six weeks. The lack of visible change however is not to be mistaken for stagnation because in the first few years, the plant grows below the ground strengthening its roots, in preparation for speedy growth at the perfect time.
What’s all this talk about bamboo you ask? Let me explain the analogy. Much like the mighty bamboo, Artificial Intelligence (AI), a term first coined in in 1956 by John McCarthy, took over five decades to become a “mainstream technology”. While there was little visible growth in the initial years, a lot was happening to develop the AI ecosystem. During this time, research on this subject continued to evolve and got more sophisticated while multiple streams of technologies started to come together to make an impact, including sensors, connectivity, highly sophisticated software, robotics and astronomical growth in processing power. Together, these became the biggest drivers of the Fourth Industrial revolution.
Based on IDC research, spending on cognitive and AI systems will reach $77.6 billion in 2022, more than three times the $24.0 billion forecast for 2018. The compound annual growth rate (CAGR) for the 2017-2022 forecast period will be 37.3%. The cognitive/AI use cases that will see the largest spending totals are automated customer service agents ($2.9 billion), automated threat intelligence and prevention systems ($1.9 billion), sales process recommendation and automation ($1.7 billion) and automated preventive maintenance ($1.7 billion)1.
Fuelling A New Reality
As businesses transform, data is increasingly regarded as a crucial asset to enabling digital reforms. Artificial intelligence, by its very nature leverages data into actionable insights fuelling digital transformation strategies and ultimately the way businesses operate.
A prominent benefactor of the AI technology is the Banking sector. AI will be used to automate threat detection and prevention systems as well as fraud analysis, programme advisors, and recommendation systems. This trend emerged due to the rise of cybersecurity threats that can greatly affect people and businesses. IDC predicted that much of the banking capital will be spent on automated threat intelligence, managing risk and fraud, and programme advisors which would have amounted to $3.3 billion in AI system in 2018 alone2. Another industry that will benefit from AI is retail, and it will be focused on automated customer service agents, expert shopping advisors, and product recommendations. IDC forecasts a five-year CAGR of 40.7% in the retail sector as it continues to adopt AI at a very fast pace3.
Banking giants like Bank of America will increasingly utilise virtual assistants and chatbot to interact with all of its 25 million banking consumers through the use of voice commands, simple texts or interactive touch4. With this technology, customers have greater access to a number of services including transacting money between accounts, finding out account balances and scheduling meetings with bank representatives where needed.
JPMorgan has also invested in AI with its contact intelligence platform. The solution is designed to analyse legal documents and extract important data points and clauses, which allows the company to review over tons of bank documents in just a manner of seconds5. The platform will also come with its own virtual assistant that will intelligently answer all customer queries through sms, voice chat, within bank premises, and through their website using chatbots.
With a huge increase in startups today, few new players are already embracing AI, using it to solve daily challenges and handle complex tasks for business efficiency. SkyHive is a rising workforce management company that matches talent to businesses based on client’s skillset requirements. The AI engine of SkyHive does the task of comprehensively identifying the top candidates to match the skillset provided and generate a shortlist to clients in just a short amount of time6. Micro-investing app, Mylo, uses AI to enable its users to start their own personal investment portfolio. The app uses the customers spare change from online purchases and invests the money in diversified portfolio based on the users preference7.
Big Opportunities, Big Challenges
While the implementation of AI brings with it several benefits, like everything else, it does also come along with its own set of challenges.
The most common challenge with AI is the fear of the technology replacing jobs. People fear that artificial intelligence will make them redundant. Not too different from the automobile revolution over a hundred years ago when people feared job losses in the horse drawn carriage industry. Yet, we’ve seen the invention of a car lead to many new jobs including mechanics, engineers and even parking attendants.
Gartner estimates that the very wise AI technology will create 2.3 million jobs by 2020, while eliminating only 1.8 million8 – the gains clearly outweighing the costs.
Another common challenge with AI is in ensuring security. For example, self-driving cars are AI-powered, and if hacked and altered remotely9, the vehicles could prove to be dangerous. However, AI algorithms can also be used to analyse data on a network to highlight and fix anomalies before they turn hazardous.
Society in itself is facing a cultural divide, where in AI will be appreciated by some who have a deep appreciation of the technology, while others are concerned on how it will affect their normal lives. As AI increasingly defines how society functions, this divide increases. Greater awareness and proper understanding of the technology will help bridge this gap.
Impact in Business Growth
With the continuous innovation and disruption AI is doing in the industry, companies need to leverage their AI platform to run the business operations efficiently to drive significant cost savings, and generate higher profits in the process. The vital data and analytics these companies get from their AI platforms will play a crucial part in the growth of their businesses as they get real time insights and make sound decisions. In addition, these positive effects of AI will directly affect their services to customers, creating higher levels of satisfaction. Clearly, AI will have a huge impact in overall productivity of businesses across the industries if it is used in its full potential. Based on research, AI has the potential to boost profitability an average of 38% by 2035 and lead to an economic boost of $14T across 16 industries in 12 economies by 203510.
Conclusion
Technology for long has amplified human potential though and will continue to do so. It isn’t as much about human fighting against technology to survive but leveraging it to become smarter and thus making the world smarter.
1 https://www.idc.com/getdoc.jsp?containerId=prUS44291818
2 https://appen.com/how-top-financial-services-companies-transform-their-business-with-ai/
3 https://www.idc.com/getdoc.jsp?containerId=prUS44291818
4 https://thefinancialbrand.com/72653/artificial-intelligence-trends-banking-industry/
5 https://emerj.com/ai-sector-overviews/ai-in-banking-analysis/
6 https://singularityhub.com/2018/08/24/4-startups-using-ai-to-solve-4-totally-different-problems/
7 https://www.entrepreneur.com/article/321747
8 https://www.techrepublic.com/article/ai-will-eliminate-1-8m-jobs-but-create-2-3m-by-2020-claims-gartner/
9 http://reports.weforum.org/digital-transformation/artificial-intelligence-improving-man-with-machine/
10 https://www.forbes.com/sites/louiscolumbus/2017/06/22/artificial-intelligence-will-enable-38-profit-gains-by-2035/#56bad03b1969
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