Chris Catliff, president and CEO, BlueShore Financial
Artificial intelligence (AI) is all around us, largely unseen, but it is fundamentally changing our world and our perceptions. The algorithms that Facebook or other apps use to hook us with our preferred news are based on our past clicks and preferences on our apps. We no longer receive "the news that's fit to print," but information that's not necessarily grounded in fact or objectively true – the "mind candy" and "click bait" we have shown we have an appetite for. The deep divisions of political tribalism that are gripping our neighbour down South are in part a reflection of individuals' chosen feedback loop.
We are in an Information Age era where AI will affect and shape how we absorb information. Stephen Hawking and Elon Musk have said the development of full artificial intelligence could spell the end of the human race. While regulation and ethical considerations need to be factored in as AI continues to rapidly evolve, there are ways that AI can be used effectively in business today.
AI is simply the mixture of machine learning, language processing and adaptive or "cognitive" computing. With this sophisticated blend, AI simulates the intelligence of humans into machines. Trained humans can perform tasks but never at the speed or scale of machines, so AI plays a major role in overcoming this unfortunate limitation to human intelligence.
Technology can open up a world of limitless possibilities. Yet it can be hard to separate hype from reality. Getting a realistic picture of AI's current practical application and its most relevant benefits can be challenging. In the past, AI has stumbled in pinning down the subtle nuances of images or voice recognition. Despite the limitations, 8 out of 10 businesses have already implemented, or are planning to adopt, AI solutions. Nowhere is this truer than in banking and wealth management.
As the financial services industry is so data intensive and the ability to analyze all of the data has become more crucial, financial institutions have been early adopters. Increasing work-force productivity, identifying opportunities and accelerating innovation are critical to meeting clients' changing needs and maintaining competitive advantage. AI is also levelling the playing field between small and large businesses. At BlueShore Financial, a full-service financial boutique with $5-billion in assets under administration, we use AI to pro-actively assist our client service. We are also exploring the launch of a new robo-advice platform in wealth management next year.
High-tech and high-touch: the dynamic duo
According to Gartner, 85 per cent of all customer interactions with a business will be managed without human interaction by 2020. But despite the incredible potential of AI to transform the customer service experience, teaching a machine human intuition is not yet feasible, so AI will only serve to enhance the human element rather than eliminate it.
Instead of viewing AI as a threat, businesses need to embrace this disruptor and leverage its benefits to increase efficiency and provide more customized service. There are a multitude of ways most businesses can leverage AI but here are three:
1. Customizing the client experience
Recommendation engines (think Netflix) can personalize the customer experience, especially for front-line employees interacting with clients. Using data about our preferences, algorithms suggest and then employees filter with their emotional intelligence to offer highly customized recommendations. Recommendation engines boost revenue and will continue to play a pivotal role. For employees, AI simplifies decisions and eases work flow – a case of automation complementing the human element.
2. Accuracy in detecting fraud
AI-based systems, compared with traditional software systems used for detecting fraud, are more accurate in detecting fraudulent patterns. By using machine learning algorithms, companies can spot emerging anomalies in the data. Financial institutions are particularly vulnerable to cybercrime, where global losses from card fraud are expected to reach $31-billion in three years, and cyberattacks are becoming increasingly sophisticated. Security goals and customer experience goals need to be in sync for fraud prevention technologies to be effective.
3. Increasing client engagement
While "chat bots" are AI-based automated chat systems that can simulate human chat without human intervention, they are being extensively applied to revolutionize customer interactions. By identifying context and emotions in a text chat by the human end-user, chat bots respond with the most appropriate reply. In addition, chat bots, over time, collect data on the behaviour and habits of that individual and can learn their preferred behaviour, adapting even more to their needs and moods. By improving customized communication, customers are more likely to be far more engaged with your company.
While AI and data analytics can appear daunting, the strategic benefits of investing in AI are a no-brainer for larger companies and those looking to scale fast. AI is the portal to a future that will continue to improve our lives faster than we appreciate. I look forward to it.
Executives, educators and human resources experts contribute to the ongoing Leadership Lab series.