When one of the major players in the AI world says that artificial intelligence is too important to be left to technologists, it’s time to sit up and take notice.
Manoj Saxena, Chairman at Cognitive Scale (and former General Manager of IBM Watson) told FundForum International in Berlin that the next three to five years would bring incredible transformation driven by AI.
Yet, Saxena warned, most CEOs and Boards didn’t understand artificial intelligence, nor its importance as a strategic business capability. Here’s what they needed to know right now.
1. AI is misunderstood
“AI today stands for both ‘artificially inflated’ and ‘amazing innovations’”, said Saxena. The problem with AI was that the narrative around it was currently being written by Hollywood and by marketers who had no idea how it really worked, as he went on to explain.
“There are two scenarios under which most people understand AI. It’s either going to kill us all, or it’s going to take all of our jobs. The truth is that neither of those things are going to happen.”
People didn’t really understand the true capability of AI, he argued. They think it’s data and analytics, but these things in themselves are not AI, they are used in AI. “It’s similar to senses, sensing more does not automatically make you more intelligent.”
Nor did AI mean NLP, machine learning and deep learning. “It’s like equating a fuel pump to a car,” he said. “These are just the tools used with AI for complex pattern recognition,” he said.
2. So what is AI?
“AI is the science and engineering of making intelligent computer programs and machines that learn from patterns,” Saxena explained. “Everything we have built so far in IT is rules-based, but rules don’t learn, patterns learn. Computers today are nothing but giant calculators. In essence what AI does is help you sense, think and act.”
3. Extending human capabilities
AI can pair with humans to produce something much more capable.
While conceding that there will be massive disruptions in the labour market because of AI, Saxena explained that only 20% of jobs will actually be replaced by it. The rest will be augmented.
“It’s the jobs with low cognitive skills and a routine that is easy to define that will be affected the most,” he said. “We mustn’t forget that this has happened with every industrial revolution, he added. “Every new technology always disrupts jobs, but also creates new jobs. A few years ago, there was no such thing as an Airbnb host, a social media manager, a YouTube content creator, or a Lyft driver.”
But we’re missing the real point, he argued, which is that what AI will actually do is extend our capabilities.
4. Everything within financial services will be affected
Within financial services, Saxona said that there was no area that couldn’t be improved by AI.
More accurate detection within risk and compliance, smarter product recommendations within portfolio management, and shorter trading and settlement times were just three of the key areas that were ripe for improvement.
Where customers were concerned, businesses could use the more intuitive sentiment and emotion analysis achieved by AI to increase customer engagement.
Market and asset Intelligence would improve through an increasing awareness of geo-spatial trends and signals.
5. There will be new jobs here too
And as old jobs within those areas disappeared, new ones would appear, he said.
For instance, within financial services there would be a need for AI explainers to regulators and AI compliance and ethics officers.
“AI is about having digitally empowered businesses, about having self-driving business processes that learn from every data touchpoint. AI takes all the data available and gets all the possible actions and learns from them continuously.”
6. There will be a next generation of asset managers
It’s a bold statement, but one that Saxena ended his thought-provoking presentation on.
“The disruption of business models is now being powered by AI. There will be a next generation of asset managers, because there are a lot of pieces that people are going to start unbundling your business around. I can’t think of a single process in your industry that won’t be impacted.
“AI will be as important as the discovery of fire.”