Disruptive technologies like artificial intelligence (AI)
and advanced analytics have had a transformational impact on the finance
industry. They are also changing the way enterprises interact with their
clients and run their organizations. The emergence and rapid growth of these
technologies helped companies enhance their processes and operations.
While data analytics refers to drawing insights from raw
data, advanced analytics help collate previously untapped data sources,
especially the unstructured data and data from the intelligent edge, to garner
analytical insights. Meanwhile, artificial intelligence replicates behaviors
that are generally associated with human intelligence. These include learning,
reasoning, problem-solving, planning, perception, and manipulation.
Some latest iterations of AI, like generative AI, can also
create creative artwork, music, and more. Though these technologies sound
diverse, their synergy would bring tremendous innovation across several
industries. When powered by AI, advanced
analytics algorithms can offer additional performance over other analytics
techniques.
World Economic Forum states that the COVID-19 crisis
provided a chance for advanced analytics and AI-based techniques to augment
decision-making among business leaders too.
In a study conducted by Forrester Consulting on behalf of
Intel, 98% of respondents believe that analytics is crucial to driving business
priorities. Yet, fewer than 40% of workloads are leveraging advanced analytics
or artificial intelligence. For instance, according to Deloitte Insights, only
70% of all financial services firms use machine learning to predict cash flow
events, fine-tune credit scores, and detect fraud.
Advanced analytics and artificial intelligence are emerging
favorites in the finance sector as they help firms authenticate customers,
improve customer experience, and reduce the cost of maintaining acceptable
levels of fraud risk, particularly in digital channels. As finance firms race
inch to disruption, the velocity of fraud attacks and threats also increases.
The amalgamation of these technologies helps mitigate such
threats before there is any severe damage, thus increasing compliance. This is
achieved by assessing risks, identifying potential suspicious activities,
preventing fraudulent transactions, and more. Since AI powered analytical
algorithms are adept at pattern recognition and processing large quantities of
data, it is key to improving fraud detection rates. For customers, they can
help authenticate any financial services they may be using and issue alert the
customer if something is wrong.
This fraud detection capability is also helpful for brand
marketers to distinguish successful campaigns and avoid wasteful spending.
Boston Consulting Group has observed that consumer packaged goods (CPG)
companies can boost more than 10% of their revenue growth through enhanced
predictive demand forecasting, relevant local assortments, personalized
consumer services, and experiences, optimized marketing and promotion ROI, and
faster innovation cycles; all via the said technologies.
While factors like data silos, fear of missing out on the
race to digital transformation and agility have influenced companies to rely on
data-driven insights, they must leverage advanced analytics and artificial
intelligence, to stay relevant in the market. In its September 2017 article, titled
“How Big Consumer Companies Can Fight Back,” Boston Consulting Group also
mentions that these technologies top industry players can use them to transform
their data into valuable insights. In other words, it can augment an
enterprise’s ability to execute data-intensive workloads and, at the same time,
keep the HPC environment adaptable, responsive, and cost-effective.
However, there are many difficulties faced by companies when
adopting them too. As per a research survey by Ericsson IndustryLab, 91% of
organizations surveyed reported facing problems in each of three categories of
challenges studied, including technology, organizational, and company culture
and people.
It is true that artificial intelligence and advanced
analytics tools allowed navigation and the re-imagining of all aspects of
business operations, and the COVID-19 pandemic expedited their adoption.
However, despite being arguably the most powerful general-purpose technologies,
companies must recognize potential, use cases, and strategize the right action
plans to accelerate their artificial intelligence and advanced analytics
undertakings.
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