Business stability is the priority for most businesses at the moment and you might think investing into R&D could impact the development of tools like AI. However, this might not explicitly be the case and AI could benefit from the situation.
There is no debate on the importance of AI technology. It has taken the world by storm and is helping to shape our lives, whether its interacting with finances or changing how we do our jobs. Heaps of capital is being distributed to companies building these types of solutions. There was a total of $22.7bn invested into AI companies globally in 2019, representing a 22% year-on-year increase, according to data from ABI Research. AI is clearly not only getting attention but is increasingly doing so.
Had 2020 been a normal year, it would have been a safe bet the funding would have continued to increase. But that is not the world we are in. We will have to wait until the end of the year to see whether funding into AI was impacted, but with the world entering a recession and companies doing what they can to survive, funding might not reach the same heights as 2019. Though if that is the case, in a few years’ time funding will probably return to where it was pre-coronavirus.
Ryan Flood chief technology officer at financial supervision software company Vizor Software, “Certainly most companies will have a natural shift of resources to prioritise business stability activities and getting to grips with new ways of working. However, this is anticipated in the short term, not medium to long-term. Furthermore, in certain scenarios, companies may seek to ramp up their AI activities to gain better intelligence into the impact of coronavirus on their business/consumers and thus ascertain how best to respond to that.”
The overall investment into AI could decline and firms could potentially begin to look at more critical aspects of the business to stop them going under. Ultimately this could hinder the development of AI solutions in the short-term, but it will not stop. Budgets will likely shrink, but AI is a core component of many businesses and they will likely continue to innovate. For companies that have AI at the centre, improving the technology could be their form of business stability.
Ronan Brennan, the chief product officer at compliance software developer CSS, said, “Firms that truly operate at the leading edge and lever AI to generate Alpha, will not be dampening those investments – AI is built into their operating fabric. On the other hand, firms that are in the exploratory skunkworks phase with AI have seen their budgets curtailed as they circle wagons, re-group and establish a firm foundation to move forward.”
Companies involved with cybersecurity and regulatory compliance have seen appetite rise. The current remote working environment has left businesses exposed to many new threats, as they were simply not prepared for this situation. Employees do not have the same security and firewall measures on their home computers and are likely to slip-up more frequently. A study from Deloitte claimed that on average 10.9% of IT budgets is being put towards cybersecurity, an increase compared to last year. AI is a core component of many cybersecurity solutions and could see a boost in development by trying to address the new challenges in the market.
Brennan added, “The compliance office has also been a focus of attention as a direct result of the pandemic, and in many cases, has had budgets increased to improve inefficiencies that were exposing firms’ abilities to file in a timely manner across a range of different regulations or optimize business continuity plans.”
Not only will RegTech and FinTech companies continue to innovate, but there could actually be increased interest from financial institutions. These firms have been gradually digitalised their operations, but the pandemic has forced them to accelerate this. There is no time to build a tool in-house and as a result many are looking for tech companies that can just plug a solution in.
Video calls have become the saving grace of a lot of businesses. Zoom, Microsoft Teams and Cisco Webex have seen their usage skyrocket. However, wide market use does not guarantee complete safety, with each of these services having certain issues. For instance, Zoom came under fire for its data privacy rules allowing it to collect information from the calls, zoom-bombing where uninvited guests could join a call and call encryption only available for paid users. To ensure complete compliance of these calls firms will need to use other tools, such as those monitoring what is explicitly said.
in a joint statement Marc Gilman general counsel and VP of compliance; chief scientist Sharon Hüffner; and director of machine learning Rohit Jain, of video and audio compliance platform Theta Lake, said that AI-enabled tools will be the only way to achieve such a feat, as legacy solutions were simply not built for it. He said, “AI will facilitate improved detection of risks in collaboration conversations and make review processes more efficient and effective.”
Cognitive View, which analyses customer communication data to identify conduct related risk, has managed to leverage the market troubles to build a new AI solution ta. Cognitive View founder Dilip Mohapatra said, “With the pandemic, we saw AFCA (Australian Financial Complaints Authority), the financial ombudsman of Australia, saw a 14% increase in complaints. We at Cognitive View saw this an opportunity to prioritize this area and have added an innovative complaint management feature leveraging AI. This will help financial firms not only identifying customer concerns and complaints early but also help them prevent it from ending up with AFCA. We have seen a tremendous interest in this capability.”
Changing the models
There might be an opportunity to make new products, but the models used by AI could fundamentally be improved following the pandemic. The coronavirus is an unprecedented event and was never prepared for by any business. As a result, governments and regulators have been looking at ensuring contingency plans are now in place to soften the impact of a similar incident in the future.
Data is where AI gets its power from. This pandemic has created a host of new information and possible eventualities. Consumer behaviours and trends will have changed during this time and could have changed forever, impacting how models work in banking, healthcare and retail, according to Theta Lake’s Marc Gilman. For example, models involving purchasing history, public transport trends and hotel occupancy will need to be adapted to become more accuracy for when major world events occur.
Gilman, Hüffner and Jain said, “The singular nature of the pandemic will have a long term influence on how AI models are constructed. New models will be built to account for catastrophic events like the pandemic. Data scientists will be seeking data that reflects the changes that have occurred during the pandemic. Organizations will be “data hungry” for new sources of information.
“However, the desire for data must be balanced with privacy and security considerations to ensure that personal information, location details, and other sensitive data are redacted or removed.
“Firms will press on with their AI initiatives during the pandemic. In fact, some of the potential model anomalies may encourage firms to update their AI and machine learning operational processes to improve the discipline applied to oversight. AI and ML ops is becoming a critical component of any firm’s technology processes, and the pandemic may prompt startups to focus on this key area.”
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