In 2016, all we saw was BLOCKCHAIN BLOCKCHAIN BLOCKCHAIN everywhere. This year it's AI AI AI...........artificial intelligence, machine learning, deep thinking. This is the MAJOR story of the year in fintech (and outside of fintech as well). While chatbots (which we've written about extensively at FintekNews) are getting employed by more companies and growing increasingly sophisticated, we're also starting to see more "friendly robots" at banking branches and elsewhere.
Meanwhile, the effects of rapid deployment of artificial intelligence are being studied (and cautioned) by the likes of Elon Musk, the US' Federal & Trade Commission and even endowments like the Knight Foundation (as in the family behind Knight-Ridder newspapers). Even on LinkedIn forums, the topic is gaining traction, given that some predict that up to 48% of all jobs could be replaced by AI within 20 years. Many in the forums are calling for US government intervention, but we pragmatically believe that without a global directive, any single government's attempt to govern and control the deployment of the technology will be futile.
At FintekNews, we always say "the genie is out of the bottle". Can't stop the technology from advancing at this point - we've just got to manage it mindfully now. Anyway, in this piece from the Harvard Business Review, the author looks at AI and the "super paretos" it will be able to mine in the future, and implications for business. Thoughtful read.
(Cindy Taylor/Publisher)
"Many high-performance organizations remain passionate about Vilfredo Pareto, the incisive Italian engineer and economist. They continue to be inspired by his 80/20 principle, the idea that 80% of effects (sales, revenue, etc.) come from 20% of causes (products, employees, etc). As machine learning and AI algorithmic innovation transform analytics, I’m betting that next-generation algorithms will supercharge Pareto’s empirically provocative paradigm. Here are three important ways that AI and machine learning will redefine how organizations use the Pareto principle to digitally drive profitable innovation to levels beyond conventional analytics.
Smart Paretos
First, greater volumes and variety of data guarantee that algorithms get the training they need to get smarter. Digital networks consequently become Pareto platforms that transform vital vectors of variables into new value.
Novel workplace analytics, for example, mean more organizations can more readily identify the 20% of employees contributing 80% of value to a product, process, or user experience. Ongoing digitalization of business processes, platforms, and customer experiences similarly invites creative Pareto perspectives: What 20% of the platform upgrade creates 80% of its impact? What 20% of customer experience evokes 80% of delight or distaste? Serious C-suites want those data-driven questions algorithmically addressed.
Super-Paretos
Second, traditional distributions have disruptively changed. The dirty little productivity secret of big data is that Pareto’s 80/20 insight has decayed into empirical anachronism. Analytically aggressive firms increasingly see Pareto proportions closer to 10/90, 5/50, 2/30, and 1/25. Depending on how rigorously the data is digitally sliced, diced, and defined, 1/50, 5/75, and, yes, 10/150 Paretos emerge. Pareto’s “vital few” becomes a “vital fewer”...
Read Full Article at Harvard Business Review