Artificial Intelligence: The road to recovery for businesses.
When you read the word, AI (Artificial Intelligence), what do you think of? Futuristic sci-fi movies like The Terminator or Her ? Robot vacuum cleaners taking over our homes ? If you find yourself picturing Arnold Schwarzenegger or Scarlett Johansson, rethinking your opinion on Artificial Intelligence may be exactly what your business needs.
And if you're thinking that Thatcham doesn't have the bandwidth to cover this month's hot topic in technology, think again. Artificial Intelligence is set to become a significant player in the automotive sector and its implications will affect every business, large or small.
Automotive AI: what it can do
Firstly, let's get our terms right. There are two types of AI, machine learning and deep learning.
Machine Learning is where machines can react to new situations based on data they've encountered in the past. Deep Learning is where machines can adapt to unknown situations by themselves, without being given a rule book beforehand.
In both cases, AI will play an increasing role in our lives as more and more companies invest in its development.
What exactly will AI do for your business? Reworking vehicle design, making manufacturing processes more efficient, marketing personalised services at scale... There are many possibilities. One of the most promising applications is for driverless cars or Autonomous Vehicles (AVs).
Self-driving cars are already on the road
If you thought that driverless cars were something out of a sci-fi movie, think again. They're already on the roads and the UK government is planning to make them legal by 2020 . Companies like Google and Uber are also trialling their own AVs in cities such as London and Pittsburgh.
The benefits that these vehicles could bring to businesses are endless. A fleet of driverless cars that collect you from work, take your children to school and return home to do the housework would free up workers at all levels across any sector.
With less commuting time, people would have more leisure time or could spend it working during the commute instead. The world's workforce would be more productive.
However, the benefits extend beyond productivity to road safety too. In 2014, there were 1.25 million road traffic accidents in the UK and 3,477 fatalities . Driverless cars could greatly reduce this figure by taking human error out of the equation - a recent Uber accident notwithstanding.
The impact on business would be significant if this technology becomes mainstream and it's not just the automotive sector that's likely to be affected.
Driverless cars: changes for insurers?
How might AI affect insurers? Only a few months ago, Thatcham Research published some interesting findings about how driverless cars could have an impact on motor insurance premiums . They found that this will depend largely on the speed of implementation and that driverless cars will reduce accidents by 18 - 40%. As a result, claims costs are likely to fall.
However, if the new technology leads to no claims, premiums could drop even further. This would mean risk shifting at its worst for motor insurers as motorists prefer cheaper policies with less cover. With savings becoming ever more important to customers , this isn't a welcome prospect.
However, there are signs that these developments could lead to an increase in motor premiums as the cost of insuring driverless cars will be significantly higher than regular ones. Add to this the fact that these vehicles risk being hacked into and it's clear that insurers have a lot to consider with regard to this new technology.
We're just at the beginning of understanding AI's full potential in both our personal and professional lives so what will its impact be five years from now? This is something everyone needs to consider when investing in their business' digital transformation .
Healthcare, AI is helping to make hospitals more efficient. An app called M3AAWG helps nurses by guiding them around the hospital, providing information about patients at their bedside in real-time.
Banks, AI has enabled faster decision making in banking by quickly assessing credit applications. It's also being used to detect money laundering and fraud.
Media, AI is finding patterns in big data that are impacting news feeds. Google's News Lab can do this by looking at huge amounts of information from social media posts, the web and content. This uses natural language processing to detect which stories and posts you're most likely to be interested in and then prioritises them for you.
What about the future? Five years from now, we'll probably see even more personalisation as a result of AI technology - both at home and work. It's likely that this will affect marketing strategies as a result.
In the meantime, businesses need to consider how they can use AI technology themselves or how it's going to affect them in the future if their competitors do so. In any case, this is something everyone should be thinking about as investment opportunities are unlikely to stop at driverless cars!