July was all about AI. Microsoft announced the shift to AI-first strategy. Gartner claimed that AI would become one of the five main CIO investment priorities by 2022. Amadeus is getting to the top of travel tech innovation. What else did the second summer month bring us? Let’s dive into this stormy sea of technology news and trends.
AI is Hurdling Barriers Racing to Its Bright FutureAI is rapidly spreading across numerous industries. According to Gartner estimates, nearly all new software products will embed some sort of AI by 2020. Large investments support that trend. Mature tech corporations and startups invested anywhere between $26 billion and $39 billion in 2016, tripling AI investment growth compared to 2013. And it’s only the beginning as AI keeps climbing to the top of Gartner's hype cycle. The three leading industries by AI adoption, according to the McKinsey AI adoption and use survey, are
- high tech and telecom
- automotive and assembling
- financial services.
An interesting story came from Qualcomm, which opened its software development kit for Neural Processing Engine for public use. The kit allows developers to link their deep learning based software directly to Snapdragon mobile processors. The framework will help dealing with scene detection, facial recognition, object tracking, and natural language processing. And this is good news as on-device deep learning processing has been in high demanded by tech companies.
But there are some AI implementation challenges remaining:
- Indistinct offerings from AI vendors. Gartner explored products and services of nearly 1000 vendors. The reality is, vendors often exaggerate the AI component in their products, simply labelling ‘AI-powered’ whenever they want. Such aggressive marketing doesn’t further prudent decision-making for consumers.
- Overcomplicated products for simple problems. It’s tempting to employ sophisticated technology for… everything. But if existing business tasks are solved by conventional techniques, AI becomes a gimmick that few businesses are ready to pay for.
- Cultural limitations. Many organizations aren’t culturally ready for AI. The lack of skills to build, deploy, and interact with AI slows down its adoption.
When AI Meets ARMicrosoft will use an AI-tailored chip in HoloLens 2, the leading headset in the augmented reality market. The new processor will be fully programmable and honed to deep neural learning for image recognition and other computer vision tasks. The release of the device is expected in 2019. This story logically links to Microsoft's strategic turn from mobile-first to the AI-first company.
Fintech is Drifting to Mass AdoptionRecent EY research claims that fintech has already reached mass adoption among early majority. Traditional financial institutions, startups, and technology companies are powering the industry transformation with open APIs, AI, and IoT. These lead to the emergence of new digital financial services, especially in China, India, the UK, Brazil, and Australia, where the pace of change is the highest.
What contributes to this growth? Over the last two years, the industry has managed to combine the availability of tech enablers with customer awareness.
Customers are now ready for the digital experience in the financial sector. Eighty-four percent of EY respondents claim the awareness of new tech opportunities in managing and keeping their finances. Back in 2015, the number was 62 percent. And 64 percent of respondents prefer digital channels to physical ones.
Digitized money transfers and payments. The most common financial operations – money transfers and payments – have become digital. They now account for about 50 percent of all fintech-based user interactions. The next most common set of digitized services is insurance. Today, about 24 percent of the population, according to the same survey, prefer digital insurance.
The main reason behind this shift is better customer experience, which increases the number of customers turning from brick-and-mortar organizations to fintechs.
Chatbots Can Deliver $8 Billion in Cost Savings to Financial InstitutionsWe at AltexSoft believe that the next big thing in the digital transformation of banking and financial security are AI-driven chatbots. And we are not the only ones who think this way. Capgemini argues that by opening their messaging platforms’ APIs to third parties, Facebook and other providers have already boosted chatbot adoption among existing banking industry customers worldwide. Users don’t need to keep a handful of standalone apps on their phones to access all financial services from different banks. Instead, bots integrate with messengers providing an all-in-one experience.
Financial companies also benefit from this approach by reducing the customer care cost and shifting from human-human to AI-human interactions. The Jupiter research cited by Capgemini suggests that potential cost savings in customer care may be as high as $8 billion by 2022. Today’s financial institution savings amount to about $20 million.
In our opinion, chatbots will redefine the traditional interactions with banking software. Users won’t have to deal with numerous forms and interfaces on mobile or desktop. The advances in text and voice recognition allow smart assistants to identify customer requests and instantly provide needed information or service options to most people. Older people or anyone who may be less tech savvy will also have access to all advanced financial offerings. But so far, fintech is a story about young and tech-driven customers.
Patients Trust Famous Digital BrandsThe healthcare industry is joining the digital transformation trend. The future of healthcare will be dictated by two technology areas: cloud and big data. Cloud technologies combined with data science solutions in healthcare are able to process unprecedented amounts of patient records to analyze symptoms and the impact of medication. Also, the cloud allows for remote diagnosis and instant access to diagnostic systems through wearables and smartphones.
Nevertheless, there are two main barriers to completion of the shift:
- People are often hesitant to share their health records with third parties without proper safety guarantees. However, the recent study by Mary Meeker, a tech analyst, showed that patients tend to trust technology giants. The survey covered 4,015 respondents and revealed that people are ready to share their health data with such brands as Google and Microsoft, 60 and 56 percent respectively. At the same time, research revealed that IBM, Facebook, and Amazon are perceived less credible showing confidence close to 40 percent among respondents.
- The IT healthcare service market is slowing down due to uncertainty in US healthcare policy.
Lyft Embarks on Autonomous DrivingLyft announced the launch of a self-driving car division. The new R&D center will employ several hundred engineers to develop their own self-driving technology. The second-largest US ride provider has already partnered with Alphabet, Waymo, Nutonomy, General Motors, and Jaguar Land Rover for data exchange. Lyft has completely changed its previous years’ strategy. The company’s prior position was that they would share data with partners rather than embarking on internal technology development.
This shift makes the company a direct competitor to its partners and another 43 companies already working on developing autonomous vehicles. The news looks quite interesting as Lyft is also preparing for an IPO during the Uber versus Waymo lawsuit. Sceptics believe that this engineering endeavor is more of a way to leverage the situation with Uber and strengthen the IPO position. It’s developing. And it will be interesting to see what happens next.
Final WordThe most interesting July occurrences were directly or indirectly related to AI. Gartner says that artificial intelligence technologies will soon become the top priority for CIOs. Microsoft changes its strategic focus, Lyft is launching an R&D center to develop self-driving systems, and Qualcomm provides an AI SDK for the development community.
Frankly, it’s hard to say when AI will become an inevitable part of our lives. But the hype is loud. And companies like Lyft rush into AI competition with close to no foundation.
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