If you are looking for an answer to the question What is Artificial Intelligence? and you only have a minute, then here's the definition the Association for the Advancement of Artificial Intelligence offers on its home page: "the scientific understanding of the mechanisms underlying thought and intelligent behavior and their embodiment in machines."
However, if you are fortunate enough to have more than a minute, then please get ready to embark upon an exciting journey exploring AI (but beware, it could last a lifetime) …
Still founder-led by Chairman and Chief Executive Officer Richard Fairbank, Capital One is on a mission to help our customers succeed by bringing ingenuity, simplicity, and humanity to banking. We measure our efforts by the success our customers enjoy and the advocacy they exhibit. We are succeeding because they are succeeding. Guided by our shared values, we thrive in an environment where collaboration and openness are valued. We believe that innovation is powered by perspective and that teamwork and respect for each other lead to superior results.
Risk-related AI applications (risk management, lending, compliance, fraud and cybersecurity) account for 72% of the total $2.8 billion in funds raised for AI vendor companies in banking, according to the latest report by Emerj Artificial Intelligence Research. Compliance and fraud-related applications make up 32% of the total AI vendor landscape in banking, but banks report these applications as a mere 19% of their current AI initiatives. Bankers today see AI as a risk-reduction technology. Their AI initiatives are likely to yield negative ROI in part because they hold naive views about AI's integration and data requirements. Banks are eager to automate compliance specifically, especially given recent data privacy laws such as GDPR.
Imagine you're meeting with your bank manager. The chances are, you'll'dress up' to give a certain impression, to look like the kind of person that meets their expectations. Perhaps you put on a suit or business attire, to make sure you appear serious, as appearance could be a factor in taking your banking request into account. You fit into a mould to try to get the best response: credit, an advantageous rate, a repayment rate. You adopt a serious look on your face and perhaps even speak differently.
More than 30% said their companies have allocated $50 million or more to smart automation projects, and more than half have already spent at least $10 million; the initiatives include various combinations of robotic process automation (RPA), artificial intelligence, machine learning, cognitive computing and analytics; highest expenditure levels were for the finance and accounting category, marked by 23% of respondents as receiving investment of slightly more than US$50 million; the technology that organizations are experimenting with or piloting the most is AI (36); 30% of companies are opting not to invest or are unsure of their plans for smart automation (KPMG Easing the Pressure Points). Lawyers surveyed think AI will be valuable for tracking billable time (53% of US layers, 49% of UK lawyers), conflicts clearance (43% and 41%), and compliance with client billing documents (34% for both US and UK lawyers) (Intapp survey reveals lawyers' attitudes toward technology). The portion of auto companies not using or testing AI rose to 39% in 2019 from 26% in 2017 (Capgemini). "The accelerated growth of RPA is being driven by high levels of efficiency and productivity that can now be achieved from intelligent automation, which combines advanced RPA, artificial intelligence and embedded analytics. The demand for RPA solutions has surged as legacy companies are now competing with'digital native' companies like Amazon and Uber, in which nearly every part of the business is completely automated"--Mihir Shukla, CEO of Automation Anywhere Inc., an RPA maker that expects to deploy three million software robots at organizations worldwide by 2020, a 200% increase from today (Wall Street Journal).
Your phone or car answering your questions doesn't sound insane anymore. AI is entering our everyday lives. We can ask a computer to order a pair of Converse sneakers, book a hotel, or schedule a romantic dinner with our spouse. Shouldn't we also be able to pay for stuff with our voices? Industries from eCommerce to banking harness voice technologies with every new piece of software released.
Worldwide spending on artificial intelligence (AI) systems is forecast to reach US$35.8 billion in 2019, an increase of 44.0% over the amount spent in 2018. With industries investing aggressively in projects that utilise AI software capabilities, the IDC Worldwide Semiannual Artificial Intelligence Systems Spending Guide expects spending on AI systems will more than double to $79.2 billion in 2022 with a compound annual growth rate (CAGR) of 38.0% over the 2018-2022 forecast period. Spending will be led by the retail industry where companies will invest $5.9 billion this year on solutions such as automated customer service agents and expert shopping advisors & product recommendations. Banking will be the second largest industry with $5.6 billion going toward AI-enabled solutions including automated threat intelligence and prevention systems and fraud analysis and investigation systems. Discrete manufacturing, healthcare providers, and process manufacturing will complete the top 5 industries for AI systems spending this year.
At a time when consumers are doing more and more on digital platforms, they also have an increasing desire for human-like conversations that can resolve issues, provide advice, help them navigate increasingly complex platforms, and make life simpler. No longer are simple chatbots the desired resolution. Consumers want contextual engagement that reflects their situation at a specific point in time and allows them to make the choice between machine or human engagement. Conversational banking is an extension of the chatbots that were originally used to respond to the most basic of inquiries. As data availability, analytic capability and digital technology improve, a more enhanced form of digital engagement will become both personalized and scalable.
It wasn't so long ago that all banking was done in a branch, by phone, via an envelope or at an ATM. Then came the personal computer, and online banking became popular because of its convenience and ability to track balances, which used to require a branch visit and updating a passbook. Today, most transactional banking is done on mobile devices. The smartphone's dominance in banking and of consumers' communication, social, entertainment, health, shopping, scheduling and research lives is the perfect example of digital integration done right. Today's smartphone replaces separate music players, cameras, game consoles, fitness trackers, personal digital assistants and a phone.
In 1997 when Deep Blue, a supercomputer, beat the then chess champion, Garry Kasparov, we all were taken aback. That was more than 20 years ago and most of us did not even know that computers like that even existed. In late 2017, AlphaZero taught itself how to play chess under just four hours and beat the world's then best chess-playing computer program. Remember, AlphaZero, the game-playing AI created by DeepMind, was not taught any domain knowledge but the rules of the game. Such is the power of machines to learn and improvise and industries across the world are tapping a machine's ability to learn and improve from its experience without being explicitly programmed.
Retail banks have long competed on distribution, realizing economies of scale through network effects and investments in brand and infrastructure. But even those scale economies had limits above a certain size. As a result, in most retail-banking markets, a few large institutions, operating at similar efficiency ratios, dominate market share. Changes to the retail-banking business model have mostly come in response to regulatory shifts, as opposed to a purposeful reimagining of what the winning bank of the future will look like. Retail banks have also not kept pace with the improvements in customer experience seen in other consumer industries.