AI and cognitive computing will be more impactful than any revolution we have seen in the past according to Arvind Krishna, Senior Vice President and Director of IBM Research who shared his ideas with technology executives at BNY Mellon’s Technology Leadership Forum in Silicon Valley.
According to IBM, every day we create 2.5 quintillion bytes of data. In fact, ninety percent of the data in the world today has been created in the last two years alone1. Traditional methods of processing the data are no longer going to be sufficient. The information and telecommunications revolution brought us to this point, but we need another revolution. Artificial intelligence offers a promise that it can process all of this data and extract value in an efficient and cost effective way.
Dramatic Value Creation
Revolutionary times like these unlock new paths to dramatic value creation. Artificial intelligence and cognitive business process management reinvent services by creating intelligent agents that can:
“The amount of data we have is exploding. Traditional methods of processing it are no longer going to be sufficient. Artificial intelligence offers a promise that it can process all of the data and extract value.”Arvind Krishna, IBM Research
Basically, you set up machines to watch what is happening, identify the process flow, extract the processing logic, set up a template for it, employ the template and continuously improve on it. You are teaching machines to automate work. Consider the value of artificial intelligence on today’s regulatory environment. Understanding the regulatory text, determining its legal constraints on operations, designing policies and procedures, ensuring compliance with full auditability − and continue doing all of this as regulations, people and systems change – is draining. According to IBM, regulatory compliance costs more than ten percent of all operational spending at major banks ─ roughly $270 billion each year. In one large bank example, there are 27,000 employees working on compliance and over 70 percent of the bank’s budget is spent on compliance, which limits the capital available for innovation and growth.
Can you replace this expensive, labor-intensive work with artificial intelligence? The answer is yes. First, through natural language processing, document parsing and machine learning you extract meaning from the digital exhaust. Second, you identify the regulatory obligations. If you can accomplish the first two tasks here, IBM estimates that you can eliminate approximately 30 percent of the overall cost. The third piece requires heavy lifting and is not as easy to automate. You must instrument your processes so that they spit out digital exhaust and you can map it to determine whether you are closing the loop of the regulatory obligations.
Blockchain is another great example that demonstrates the value of cognitive business process management. It is a platform for shared processes and represents a new way to perform transactions that enhance trust, accountability and transparency. Blockchain optimizes complex transactions to reduce time, remove costs, mitigate risk and enable new business models.
A Digital Platform
Taking advantage of artificial intelligence requires an infrastructure investment to build a digital, platform based ecosystem. The benefits far exceed any cost when you consider the long-term value associated with lowering human error rates, increasing efficiency and improving end-to-end business processes – as well as the opportunities to turn vast amounts of data into business intelligence. As the web of interconnected devices, systems and sensors continues to expand, the time is right to tap the potential of artificial intelligence to fuel industry growth and even raise the global standard of living.
1 SINTEF. “Big Data, for better or worse: 90% of world’s data generated over last two years.” Science Daily, 22 May 2013.
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