Decoding Artificial Intelligence for Businesses

A great TAG session at Cox Enterprises! The Artificial Intelligence experts in the Metro Atlanta area successfully deciphered AI for the un-initiated and the worried. 

Here are some takeaways for those rearing to go commercial with AI:

Collection of customer data over the last 10-15 years, GPU-accelerated computing, and mathematics advances have led to the current hype around Artificial Intelligence. AI is an amalgam of pattern recognition, object recognition, and Natural Language Processing. There are hundreds of AI pilots underway, but most are in guinea pig state. Fears that if enterprises do not leap into AI, they will become dinosaurs are exaggerated. 

Crucially enterprises should determine the following criteria when deciding on AI.

Which function/customer need are they aiming to replace?

Does AI show real precedents in the industry/domain? What is the state-of-the-art technology in AI which is relevant to your industry?

Do you have the requisite raw data? Are you prepared to buy it for Al's purposes?

Which process will AI scale-up, optimize or make more productive?

This research is crucial to ROI as the adoption curve in AI is a minimum of three years. 

Sectors getting VC attention are finance and healthcare. 

Machine Learning and AI will be crucial to data security in finance. But currently, data is overwhelming AI. AI processes are far from state-of-the-art. Still, an eventual AI revolution is inevitable as AI can chase scenarios, speed up reactions and throw up multiple possibilities of causation and correlations. 

Most enterprises will jump in at the early and late majority stages. 

Examples where we already encounter AI are Amazon and Netflix recommendations. In the credit score industry, mortgage AI will soar, but later. 

Conclusion: Strategic potential of AI is immense. Enterprises need to strategize. Budgets should cater to implementation and validation and the cost of acquiring talent. Businesses should train stakeholders to think about breaking down functions to optimize eventual AI adaption.

Is it time for enterprises to strategize for Advanced Innovation?

The three-year return of Investment period, the long adaptation curve, and risky restructuring of operations and customer-facing processes are some of the realistic disruptions that enterprises face if they invest in emerging technologies of SMART, AI, Robotics, or Machine Learning. 

And although many of these technologies are in pilot stages, their inherent capability to chase down scenarios, speed up reactions, and throw up multiple possibilities of causation and correlations have been demonstrated. 

The front runners like Amazon, IBM, and Google have shown that an advanced technology revolution is inevitable. And so, enterprises are struggling to understand when and how to leap into advanced Innovation. 

At the recent events organized by the Technology Association of Georgia, AI experts showcased their real-life implementation experiences.

Is AI mainstreaming?

Cognitive systems like AI have already made product recommendations, personalization, and predictive maintenance in manufacturing accessible to many industries. However, a more profound advanced innovation with integrated deep learning is in various stages of development. 

"Customer data, GPU-accelerated computing, and cloud storage have unleashed new pools of data which in turn have set new frontiers of optimization and profitability, "explains Dr. Rajkumar Bondugula, Principal Data Scientist at Equifax. 

While the possibilities of AI have been recognized, it, along with its subset Machine Learning, is an amalgam of pattern recognition, object recognition, and natural language processing. "The possibilities are many, but just 8 of every 100 AI projects underway have evolved beyond pilot stages," says Dan Faggella from Techemergence, an AI market research company. He confirms that venture capital in AI is flowing into healthcare and finance. 

McKinsey reports that between 2010-2015, the same amount of investments were made in the new AI-enabled services as in the first half of 2017 (app US$18 billion). 

Since possibilities range from enhanced SCM to context-aware robots or business support automation functions, enterprises at the TAG event were keen to make the right bets.

Diagnostic Questions that matter: Tracy Moore founding partner, of Triias Corp, a machine learning and AI tech provider, succinctly identified four parameters to carve an effective advanced innovation strategy: 

Which functional/customer need will the InnovationInnovation replace?

Does AI show real precedents in the industry/domain? 

Or what is the state of the art of technology which is relevant to your industry? 

Does the enterprise have access to data, or does it have the financial capability to access data? 

And finally, which process will AI scale-up, optimize or make more productive?

Predictive Data advantage

AI experts emphasized that harnessing the predictive value of data is crucial to a digital sound strategy. 

"We have scores of thousands of cataloged data. We use a minuscule percent of available data. We do not need technical wizardly just vendors who can leverage data," said Michael Connor, AI leader Coca-Cola. 

The beverage giant has designed AI-infused vending machines to enhance customer experience through intuitive predictions and predict and manage consumption for special events. CocaCola's "data lakes" were precursors to its AI program. The availability and capability to leverage these data lakes will form an essential part of the financial decision to venture into AI for many enterprises.

In this context, Samir Saini, CIO, City of Atlanta, talked about data democratization. "With at least seven citizen databases, we aim to create an Enterprise Data Platform, equipped with anonymized data and governance and privacy codes. This project should help enterprises." 

Advanced InnovationInnovation: the look and feel 

Treasure troves of data collected through various sources, including interactive customer experience, revealed to UPS and Comcast that demand for InnovationInnovation was pervasive among their customers. 

"The visceral feedback from customers shows us the innovation potential," says McMaster. In September, for example, Comcast rolled out TV streaming for its broadband customers where packages start slim and lean and offer add-ons.

For UPS, this pervasive innovation-on-demand among its customers meant it had to design InnovationInnovation that was scalable for operations and IT uptime. Says UPS's Derek Banta. "Sometimes InnovationInnovation actually means iteration. But we celebrate every little trophy." 

City of Atlanta's CIO Samir Saini said that the town harvests data from Atlanta's 30 departments. "We identify technologies which will help us leapfrog in predicting and dealing with challenges of growth and urbanization," Saini predicts tangible transformation of municipal ecosystems as data and InnovationInnovation profoundly impact public safety and mobility.

Comcast's Will Mcmaster stressed the importance of housing innovation in "products" to be able to celebrate tangible "victories in every department." And UPS' Derek Benta says that as a 110-years old engineering company adopting advanced InnovationInnovation meant "blurring the lines between operations, technology, and customer marketing." 

Chief Collaboration Officer

Whether to scale up, optimize, or become more productive, all AI executives emphasized that InnovationInnovation required effective communication in real life. 

 "Driving InnovationInnovation was all about people and communicating to them. We have to drive it through the organization, top-down while keeping in the loop the regional heads, regulatory framework, the venture arms as well as research organizations," says Mcmaster. 

UPS's Banta believes that innovation executive has to be in permanent salesperson mode. He has to create "champions" in operations which will both push the painstaking process of identifying areas of InnovationInnovation and later help scale up innovations. 

Coca-Cola's Connor advised a separate budget and office for innovation officers equipped with SWOT teams that develop prototypes and test them in six-week hackathons before scaling or replicating them.

Ecosystem matters

AI executives also dwelled on the future of ecosystems in which advanced InnovationInnovation will live. Comcast's McMaster was partial towards open source systems. He also emphasized that the following product is "data." The key will be harvesting the data and then partnering for technology. 

Coca-Cola's Connor believes that vendors like Accenture who have insights into various domains and industries should leverage data to provide insights for enterprises. 

For UPS, Innovation means handling the scalability of operations and planning for IT uptime. Other experts pointed out that progress in wireless will determine the pace of the adoption of AI. 

In conclusion, the strategic potential for advanced InnovationInnovation is immense. Enterprises certainly need to do a sweeping landscape, vendor, and value chain analysis to determine whether they will be early or late adopters. Their budgets will have to cater to implementation and validation and the high cost of acquiring talent. In any case, the time has come to train all kinds of stakeholders to break down functions to optimize eventual AI adaption.

Paternity Leave: Many dads own it, now lawmakers should

I came across an exciting book called All in. With compelling interviews with new and old fathers, his personal journey as a parent 

and quick stats, Josh Levs makes a persuasive case for the concept of paid paternity leave in the US.

The latest Pew survey reinforces the exigency of Josh Lev’s research and tone. Over 82% of the surveyed said they support paid maternity leave, and over 60% support paid paternity leave. http://pewrsr.ch/2mwtMRiLevs book delves into how gender bias, tax tilts, corporate and governmental inequity come together to keep United States as the only OECD member that offers no statutory entitlement to paid family leave on a national basis.

http://bit.ly/1HEWGw8 What makes ALL IN unique is that it zooms in on fathers who talk about their wishes and ambitions of nurturing children.

In Europe, the debate has zigzagged its way to many innovative solutions. The new reforms in Germany, for example, offer a “partner bonus” concept wherein both parents are encouraged to take leave, implying that childcare can be shared equally between partners. More importantly, the law nudges men, society, and corporations to tackle head-on the taboo of paternity leave. It is not as if men there don’t take a leap of faith, but an outdated law serves as a clap back. An updated one can create role models. It’s always easier to follow suit. The US has bickered for over two decades about the ideological best match. It now needs a federal law to nudge corporations, HR experts, and strategists to be forced to adapt to it. ALL IN and Pew surveys are evidence that the mindset has evolved. Even an imperfect federal law will kickstart the refinement process. It will nudge more and more men and women to opt for paid family leave. The Democrats can take a cue from ALL IN and make paid family leave a platform issue. 

Healthcare Bill: Psychology Trumps

http://cnn.it/2m0TEnU CNN reports that Trump administration officials acknowledged to Republican senators at a White House meeting Tuesday that the House bill to repeal and replace the Affordable Care Act (ACA) is in serious jeopardy. http://politi.co/2mtb6wK Politico reports that “the Trump administration soon after taking office scaled back enrollment outreach during the critical final week of sign-ups. And yet “between Nov 1 and Jan 13 a total of 12.2 million people enrolled in Obamacare”. Why indeed?

The most palpable behavioral concept that makes Trumpare such a formidable legislation to champion is the Endowment Effect. People simply value stuff more because they own it. Indeed the very fact that ACA, however imperfect it may be,  exists and is owned and signed by millions, makes it such a formidable legislation to repeal. Millions are now emotionally invested in a crucial ambition: ambition to feel financially secure about their old age health. In the last seven years the healthcare has morphed from privilege to right. And aversion to losing  a right has has made ACA popular.

When champions of “repeal and replace” try to sell the insurance to the healthy millennials and make it more costly to aged baby boomers, their intentions become very apparent. They are practicing “Adverse Selection”, that is selling insurance to buyers who are least likely to demand large claims. While economics makes adverse selection a major profit and loss premise for insurance industry, it remains a political hardsell.

Champions of Trumpcare are trying to provide “choice” or “the opportunity to choose healthcare" as an advantage in comparison to ACA which offers a limited number of players. To an ambitious and (insecure) customer, the political cacophony around ACA is bad enough. Once the customer understands that he is expected to make a rational, cognitively complex choice in a confusing scenario, he inches towards status quo. This status-quo bias stipulates that most humans tend to maintain the current choice and change nothing. 

So as Trumpcare edges forward through the political process, psychology of the voters make the new legislation a risky political gamble. 

Traders, mortgage managers and bankers: Behavioral lessons from the Oscar-nominated The Big Short

BloombergView columnist and author Michael Lewis described Richard Thaler, the eminent behavioral economist as “either way widely disruptive” http://bv.ms/1SGKuV9. Thaler is in news for his new book Misbehaving, as well as for a short sequence in The Big Short based on Lewis’ book. In the film Thaler waxes eloquent about “extrapolation bias” as Selena Gomez equates side bets in blackjack to the synthetic Collaterralised Debt Obligations (CDOs). Sosubprime crisis is back in news adorned with Oscar hues. 

Below are three behavioral biases oft associated with subprime crisis and which characters in the movie embody.

Avoid overextrapolations of past data, rely on real time:

Humans (here mortgage managers, homebuyers) tend to be overenthusiastic about past data. They tend to be too optimistic about past inflations and pay more in present. Past low default rates could have persuaded the mortgage managers to imagine that past will repeat. Of course AAA ratings provided the extra optimistic cushion to believe in this past phenomenon.

Solution: Stay real and rely on real time data. Apps like Compass are beginning to get investors closer to real time real estate data.

When a product strikes a discordant note, pause and research 

The Big Short shows several crackerjack finance professionals repeatedly deluding themselves to believe in subprime securities.

Cognitive dissonance (CD).  Some evangelist characters in the movie tried to point out and prove the price discrepancies in subprime and home loans data. But the majority of real estate decision makers were loath to acknowledge the red flags as that would counter their justification of selling a lucrative product. 

Solution: Do not let yourself to be manipulated to believe in the optimistic outcome. If a product induces dissonance try to minimize it by by more research into the product. Make sure there are no untruths.

Embrace Ambiguity, do not let the feeling of loss overcome sell decisions

The Big Short ends when the evangelists in the film fathom that loan defaults will lead to a run on the banking system. Why did so many people sell at the same time? 

Ambiguity aversion (AA). People do not like to be in situations where they feel  incompetent, when they cannot assign a probability to a future outcome. So when they see evidence of the negative outcome in other people’s investment, they tend to remember their own painful losses and feel less inclined to  bear a future loss (or take risk). Solution: Be aware of loss aversion before selling. 

Hi. My name is Ritu Gurha Lisso. I am a social media content writer and a behavioral finance enthusiast. As a polyglot finance journalist I have worked in India, South Korea, Singapore, Germany and USA.  I am passionate about creating social content and social strategy. Please feel free to reach out and connect with me @ritugurha.  

Traders: 3 Behavioural tips to navigate the Yellen Hike Event

Traders, as you know, economic influencers are weighing in on December 16 interest rate hike. Larry Summers, for example, pronounced that plausible bubbles are no longer plausible. In the same breadth he also said that increasing rates as a prophylactic against financial instability is quiet odd. http://bloom.bg/1lLpiBy 

Given that the landmark hike moment is inevitable, here are 3 behavioral biases which you need to be aware of when dealing with new events.

Economists really want Janet Yellen to explain what gradual means https://t.co/V0eEMp993o pic.twitter.com/6RgyyrtZdS

— Bloomberg Business (@business) December 11, 2015

Embrace Ambiguity: Know your asset: Research has revealed that if you are feel competent enough to understand your asset you can guard against ambiguity aversion. In other words you would be better able to assign probability to an outcome then just pure conjecture or following the herd. Competence will help you better embrace ambiguity.

Don't let difficult and new manipulate: Compare if it is worth it. Risk perception increases when we compare the new with a situation which was familiar and therefore easier to analyse. So although availability of low interest rates is familiar, implications of investing in familiar should not be compared to the implications of unfamiliar. Analyze the risk of the current policy without comparing the advantages of past. 

Don't amplify Loss: Be aware that if loss coincides with a new event, its psychological impact gets magnified. The real absolute loss can still be contained. Guard against this amplification effect.

Hi. My name is Ritu Gurha Lisso,  a business journalist plus content writer plus social marketing pro all folded into one. I am a polyglot and have lived and worked in Asia, Europe and now USA. I have managed to meander from art reviews to bonds market analysis and behavior finance. In my current avatar as a business communications professional and a behavioural finance enthusiast, i am passionate about creating social content and social strategy. Please feel free to reach out and connect with me @ritugurha. 

Wealth Managers: 3 Behavioral Tenets to tackle the tech-savvy Millennials

CMOs, and finance product developers have been surveying the financial habits of millennials with passionate alacrity. Merrill Lynch, for example, discovered that the millennials want to remain in the driver seat when it comes to investments http://bit.ly/1zYRdAb Goldman Sachs found it crucial that the millennials are the first generation of digital natives “used to instant access to price comparisons, product information and peer reviews.”  http://on.mash.to/1Y3kZx4

 As a behavioral financial enthusiast I would like to give 

three tips for those seeking to cultivate the millennial wallet.        

Some Brands Millennials Love

  Navigate thrift: Millennials’ conservative Mental accounting: Scarred by  subprime crisis, the Euro crisis and student debt, millennials are trust  deficient and conservative mental accountants. Their meagre economic  assets are clearly invested in their lifestyle, and belief in remaining debt  free. To make them part from their cash into a financial product, the  advisor has to make sure that he is addressing that internal account  which is for investing (and not necessarily for any particular class of  asset). So platforms with multiple assets count.   

   Make them explore: (representative herustics, confirmation bias):  Millennials have grown up steeped in technology. Advisors and  marketeers need to counter this salience, this innate affinity to  technology by making non technology assets in portfolios more cool. Pointing out the green value of an asset or  its intrinsic social value will make the portfolio more attractive. 

 Exploit the Herding: Millennials are sociable, (social) community oriented and as a group, scarred by their past.  So they are “underreacting” to  retirement and investment. As in consumer marketing, devise platforms where  social peers can compete and connect about retirement and investment and learn about simple facts like  “equities have had a bull run for last five years”. A peer group “Urgency” about investment and retirement will  create a positive dynamic.




Hi. My name is Ritu Gurha Lisso,  a business journalist plus content writer plus social marketing pro all folded into one. I am a polyglot and have lived and worked in Asia, Europe and now USA. I have managed to meander from art reviews to bonds market analysis and behavior finance. In my current avatar as a business communications professional and a behavioural finance enthusiast, i am passionate about creating social content and social strategy. Please feel free to reach out and connect with me @ritugurha.