Other parts of this series:
Several key metrics indicate that investment in capital and labor are not driving economic growth in the developed world as they once did. Research from Accenture reveals that AI could become a new engine of growth, potentially doubling annual economic growth rates in 12 developed economies.
As a new factor of production, artificial intelligence (AI) has the potential to drive growth in at least three important ways. Last time, we looked at the application of intelligent automation systems like IPsoft Inc.’s Amelia®. IA solutions are most applicable in situations where relatively simple decisions need to be made at high volumes. Today we’ll focus on the opposite—AI’s potential to improve decisions of extreme complexity and lower volume.
This is the realm of “intelligent augmentation,” where AI enables the more effective use of existing labor and capital assets.
For instance, fraud detection is a major concern for many banks. Financial services firms process a large number of transactions—too many for human bank employees to inspect each one for evidence of fraud. Yet bad actors are devious and ingenious, making purely automated systems of fraud detection fraught with peril.
AI’s augmentation capabilities offer a solution to this dilemma. Machine learning systems at banks can be “taught” to predict fraud based on certain key metrics and patterns. Such an AI system could monitor all of the transactions at a bank, flagging risky ones for further investigation by humans with the judgement and expertise to investigate if needed.
AI can call attention to patterns that humans cannot see; humans can use their experience and emotional intelligence to make the final call.
Another striking example of AI’s ability to make labor smarter comes from Praedicat, Inc., a risk modeling firm based in Los Angeles. Its AI platform uses machine learning and big data processing to help insurance underwriters better understand risk as they write property and casualty insurance.1
Praedicat Inc.’s platform has “read” more than 22 million peer-reviewed scientific papers, making it possible for underwriters to incorporate staggering amounts of information into their risk analysis.2 In this way AI lets insurers price risk with greater speed and accuracy. It also helps them develop new products faster.
AI can also let humans focus on the parts of their job that require a true “human touch” in other ways. For instance, hotel workers spend a lot of time making routine deliveries to rooms. Relay™, an autonomous service industry robot developed by Savioke Inc., lets hotel workers ditch drudgery and redirect their time towards initiatives that will truly delight customers. Last year it made more than 11,000 deliveries across five large hotel chains. Financial services firms could use systems like Relay™ to eliminate similar repetitive tasks.3
AI’s impact on capital efficiency is at least as promising—an important consideration for banks making investment and lending decisions.
For example, the industrial robotics company Fanuc Corporation, in partnership with Cisco Systems, Inc. and other firms, has created the Fanuc Intelligent Edge Link and Drive (FIELD®) system. The FIELD® system is an analytics platform powered by advanced machine learning. It captures manufacturing data and analyzes it to reduce factory downtime, which can cost tens of thousands of dollars per minute.4
FIELD® has already been deployed in an 18-month “zero downtime” trial at one manufacturer, where it realized significant cost savings.5 It is easy to imagine similar applications in other industries with large sunk costs in capital. For instance, AI analytics platforms could help shipping firms expedite travel times and lower risks.
The above uses of AI to augment labor and capital give a sense of how these new technological systems are already changing the banking industry and the larger economy in which it is embedded. They likely pale in comparison to what will follow in the years between now and 2035. The enormous impact of these innovations is part of what makes them some of the most talked-about stories in the world of AI.
Come back next week for a look at a benefit which is much more obscure, but no less important: innovation diffusion. In the meantime, you can find more AI insight from Accenture here.
- The Digital Insurer, “Praedicat make the world a safer place,” 2016. [Accessed 15 August 2016].
- The Daily Mail, “Robot room service is here! Droid delivers everything from Starbucks to toothpaste (and it doesn’t expect a tip),” 2016. [Accessed 20 November 2017].
- Tantzen, B., “Connected Machines: Reducing Unplanned Downtime and Improving Service,” October 6, 2015. [Accessed 29 June 2016].
- FANUC, “Manufacturing Automation Leaders Collaborate: Optimizing Industrial Production Through Analytics,” April 18, 2016. [Accessed 20 June 2016].