Applications of Artificial Intelligence (AI) in business

July 20, 2018
5 mins

Businesses that use Artificial Intelligence (AI) and related technology to reveal new insights “will steal $1.2 trillion per annum from their less informed peers by 2020.” predicts Forrester Research.

Although AI has been around since the 1950s, it is only recently that the technology has begun to find real-world applications (such as Apple’s Siri). The investment in AI by both tech giants as well as start-ups has increased 3 folds to $40 Billion as of 2017.

Recent advances in AI have been helped by three factors:

  1. Access to big data generated from e-commerce, businesses, governments, science, wearables, and social media
  2. Improvement in machine learning (ML) algorithms—due to the availability of large amounts of data
  3. Greater computing power and the rise of cloud-based services—which helps run sophisticated machine learning algorithms.

Applications of AI

AI is important because it can help solve immensely difficult issues in various industries, such as entertainment, education, health, commerce, transport, and utilities. AI applications can be grouped into five categories:

  • Reasoning: The ability to solve problems through logical deduction. e.g. financial asset management, legal assessment, financial application processing, autonomous weapons systems, games
  • Knowledge: The ability to present knowledge about the world. e.g. financial market trading, purchase prediction, fraud prevention, drug creation, medical diagnosis, media recommendation
  • Planning: The ability to set and achieve goals. e.g. inventory management, demand forecasting, predictive maintenance, physical and digital network optimization, navigation, scheduling, logistics
  • Communication: The ability to understand spoken and written language. e.g. real-time translation of spoken and written languages, real-time transcription, intelligent assistants, voice control
  • Perception: The ability to infer things about the world via sounds, images, and other sensory inputs. e.g. medical diagnosis, autonomous vehicles, surveillance

Here is an infographic by Mckinsey that shows the extent to which AI can be used end-to-end in the retail industry from identifying customers to personalizing promotion to inventory management.

Applications of Artificial Intelligence (AI) in retail

Source: McKinsey

AI trends in various sectors

1. Healthcare

AI and ML technology has been particularly useful in the healthcare industry because it generates massive amounts of data to train with and enables algorithms to spot patterns faster than human analysts.

  • Medecision developed an algorithm that detects 8 variables in diabetes patients to determine if hospitalization is required.
  • An app called BiliScreen utilizes a smartphone camera, ML tools, and computer vision algorithms to detect increased levels of bilirubin in the sclera (white portion) of a person’s eye, which is used to screen people for pancreatic cancer. This cancer has no telltale symptoms, hence it has one of the worst prognoses of all cancers.
  • NuMedii, a biopharma company, has developed a platform called Artificial Intelligence for Drug Discovery (AIDD), which uses big data and AI to detect the link between diseases and drugs at the systems level.
  • GNS Healthcare uses ML algorithms to match patients with the most effective treatments for them.

2. Entertainment

A familiar application of AI in everyday life is seen with services like Netflix or Amazon, wherein ML algorithms analyze the user’s activity and compare it with that of other users to determine which shows or products to recommend. The algorithms are becoming intelligent with time—to the extent of understanding that a user may want to buy a product as a gift and not for himself/herself, or that different family members have different watching preferences.

3. Finance

  • Financial services companies use AI-based natural language processing tools to analyze brand sentiment from social media platforms and provide actionable advice.
  • Investment companies like Aidya and Nomura Securities use AI algorithms to conduct trading autonomously and robo-traders to conduct high-frequency trading for greater profits, respectively.
  • Fintech firms like Kensho and ForwardLane use AI-powered B2C robo-advisors to augment rebalancing decisions and portfolio management performed by human analysts. Wealthfront uses AI algorithms to track account activity and help financial advisors customize their advice.
  • Chatbots, powered by natural language processing, can serve banking customers quickly and efficiently by answering common queries and providing information promptly.
  • Fraud detection is an important application of AI in financial services. For example, Mastercard uses Decision Intelligence technology to analyze various data points to detect fraudulent transactions, improve real-time approval accuracy, and reduce false declines.

4. Data security

Cyber attacks are becoming a growing reality with the move to a digital world. There are also concerns about AI programs themselves turning against systems.

  • Automatic exploit generation (AEG) is a bot that can determine whether a software bug, which may cause security issues, is exploitable. If a vulnerability is found, the bot automatically secures it. AEG systems help develop automated signature generation algorithms that can predict the likelihood of cyberattacks.
  • PatternEx and MIT’s Computer Science and Artificial Intelligence Laboratory (CSAIL) have developed an AI platform called AI2 which claims to predict cyber attacks better than existing systems. The platform uses Active Contextual Modeling, a continuous feedback loop between a human analyst and the AI system, to provide an attack detection rate that is better than ML-only solutions by a factor of 10.
  • Deep Instinct, an institutional intelligence company, says that malware code varies between 2%-10% in every iteration and that its AI model is able to handle the variations and accurately predict which files are malware.

5. Manufacturing

  • Landing.ai claims to have created machine-vision tools to find microscopic defects in objects like circuit boards using an ML algorithm trained using tiny volumes of sample images. In the future, self-driving robots may be created which can move finished goods around without endangering anyone or anything around.
  • Robots in factories are often stationary but are still in danger of crashing into objects around it. A new concept called collaborative robots or “cobots, enabled by AI, can take instructions from humans, including instructions that the robot has not been previously exposed to, and work productively with them.
  • AI algorithms can influence the manufacturing supply chain by detecting the patterns of demand for products across geographies, socioeconomic segments, and time, and predicting market demand. This, in turn, will affect inventory, raw material sourcing, financing decisions, human staffing, energy consumption, and maintenance of equipment.
  • AI tools help in predicting malfunctions and breakdown of equipment and taking or recommending preemptive actions as well as tracking operating conditions and performance of factory tooling.

6. Automotive industry

  • Tesla introduced TeslaBot, an intelligent virtual assistant integrated with Tesla models S and X, allows users to interact with their car from their phone or desktop.
  • Uber AI Labs is working on developing self-driven cars with the help of the best engineers and scientists. Uber has already tested a batch of self-driving cars in 2016.
  • Nvidia has partnered with Volkswagen to develop “intelligent co-pilot systems” in cars that will enable safety warnings, gesture control, and voice and facial recognition.
  • Ericsson predicts that 5G technology will improve vehicle-to-vehicle communication wherein sensors will be implanted in airport runways, railways, and roads.

Conclusion

Jack Ma, the founder of Alibaba, warned the audience at the World Economic Forum 2018 at Davos that AI and big data were a threat to humans and would disable people instead of empowering them. However, given the sweeping real-world applications of AI and ML and the constant advancements in the field, it is more likely that the technology will transform the way we work—enabling faster, more informed decisions, increasing operational efficiency, and innovating new products and services.  

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About the Author

Satabdi Mukherjee
Satabdi Mukherjee is a freelance writer with a special interest in business and technology. She likes to stay informed about the latest developments around the world and considers herself an information junkie.

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