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Artificial intelligence (AI) is nothing new. In fact, with more than half a century gone since Alan Turing presented the Turing Test, the technology has been around for quite a while. So why has the phrase “artificial intelligence” suddenly become such a buzzword? What exactly is AI, and what opportunities does it bring?
Lloyds Banking Group’s risk transformation director, Claire Calmejane, studied AI and cognitive science at university many years ago, and said that although the technology has been around for ages, with the birth of new technologies, “we are really just at the beginning of the journey” when it comes to the use of AI.
The technology is “evolving, learning and maturing”, said Calmejane, and the ever-growing amount of data being generated continues to bring new opportunities.
Some 90% of “all the data of the internet” has been generated in the last two years, she said, and technological developments have exponentially increased our capacity to produce data.
For example, the advent of cloud technology enables us to store data at a lower cost, anywhere in the world, and new software allows us to manipulate and handle the data in entirely new ways.
AI and business transformation
AI is one of those technologies that, like others before it, has, or will, lead to huge changes in business processes.
Sarah Burnett, research vice-president at the Everest Group, said the rise of digital has created a need for businesses to change the way they work.
Over the last 20 years, we have seen the rise of the arbitrage model, with shared service centres and the offshoring and outsourcing of services, she said. Then came the rise of lean methodologies and legacy tools brought together, and the rise of wrappers and connectors.
“What we are seeing today is the rise of digital and, in terms of using self-service channels, the possibility of automating the processes that organisations have to run behind the scenes to cater for this new digital world,” said Burnett.
“It’s about the elimination of manual work – really bringing the back office to the front office.”
Burnett said the emphasis now is on automation, particularly RPA, which “doesn’t inherently have any intelligence”, as well as cognitive AI-enabled tech, which “is really changing the equation completely”.
RPA is where you can, for instance, schedule a robot to work behind the scenes in the datacentre, and automate “all kinds of things, as long as the data is structured data”, she said.
RPA delivers a return on investment very quickly because it is a quick and easy deployment, said Burnett. The added benefit is that RPA goes through the user interface, and you can just switch it off if something goes wrong.
“The kind of benefits you would get is reducing error rates, with regulatory compliance embedded into the RPA robot,” she said.
“With [cognitive] AI, you have to make it a bit harder and make sure that it continues to use the regulatory instructions you’ve given it, because some AI is based on machine learning, which means they can change their behaviour, so you do need some safeguards around that.”
AI in banking
AI has been around for a while in the banking sector too, said Calmejane, but it is only recently that it has become part of the banks’ identity.
“AI has become more relevant in banking now, because we have enough trusted data to enable us to maximise operations and offer data-enabled customer experience,” she said.
“That’s bringing a new hunger about how we want to exploit this data, because it’s about how we want to make it better for the customer.”
AI is being used across the board in banking, said Calmejane, including customers using speech and image recognition to log into their banking products, having their experience personalised, being offered help 24/7 through chatbots, and receiving smart alerts. AI is also used in mortgage and loan applications, with algorithms making lending decisions.
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These uses of AI have led to new business models emerging, and data roles being the most sought-after in the market, said Calmejane.
But although there is a lot of AI-related innovation, Calmejane said has yet to see it cause proper disruption.
“Most of the changes we are talking about are very incremental,” she said. “So they make some areas of life better, but they are not disruptive.”
To take full advantage of AI, organisations need to change the way they conduct transformation programmes, said Calmejane. “You can’t think of this as a five-year project because the technology is not going to be relevant in five years,” she said.
“You need to think about how you can do it in one year, what your minimum product is and how you can release value quickly for your business, and build from there.”
AI also produces a need for new skills, which are in short supply. According to research, two-thirds of businesses lack the relevant skills to adopt AI.
The big machine takeover?
Although AI brings many benefits, some people are worried that it could have a negative impact on our future.
A recent survey by OpenText showed that 21% of British citizens are worried that their job will be replaced by AI software in the next 10 years.
Yes, AI will disrupt jobs, and many of the job roles that exist today may be taken over by robots in the future.
But Burnett said there are complexities that currently require a human in the loop, such as if you have different types of data that a machine cannot cope with.
With machine learning, the machine watches and learns “so you get this mix of human agents and cognitive robots working together”, she said, but as time goes by, “the proportion of work done by the cognitive robot could increase, and the human part could decrease”. This is where the fear of job losses comes in, said Burnett.
AI creates jobs
However, new technologies will also bring new jobs that don’t currently exist. Gartner research shows that AI will begin to create more jobs than it replaces in 2020, with two million more jobs created than are replaced by AI by 2025.
There are also concerns around machines and robots making important decisions about people. Here, transparency is key, said Burnett.
“Because AI as a machine doesn’t have an ethical framework, we have to give it that ethical framework,” she said.
“There is a lot of worry about robots being taught the wrong things, and AI going rogue on us and perhaps being used maliciously. I think it’s an evolving world and we do have to be aware of these risks.”
To tackle these risks, the House of Lords select committee on AI set out a series of principles it believes AI development should follow, including that the technology should “operate on principles of intelligibility and fairness, and not be used to weaken data rights and privacy”.
It added that “the autonomous power to hurt, destroy or deceive human beings should never be vested in artificial intelligence”, and called for a cross-sector code of ethics.
The future of AI
According to Calmejane, although AI has been around for a long time, we are only “just at the beginning of the journey”.
“There is still much more to come,” she said. “Technologies such as cloud, deep learning and speech are all fairly new, so there is a lot to explore.”
So what does the future of AI hold? With changes in technologies happening “so fast, it’s difficult to keep up”, it is impossible to say, said Burnett.
One thing is for sure, though – artificial intelligence is here to stay.