A headshot of Anand Rao, a Partner at PwC and expert in analytics and artificial intelligence

Anand Rao is a principal in PwC’s Advisory practice, is the Innovation Lead for the US firm’s Analytics Group and is the co-lead for the Global Project Blue, Future of Insurance research. With his PhD and research career in Artificial Intelligence and his subsequent experience in management consulting he brings business domain knowledge, statistical, and computational analytics to generate unique insights into the practice of ‘data science’.

Prior to joining management consulting, Anand was the Chief Research Scientist at the Australian Artificial Intelligence Institute. He has held Board positions at start-ups and currently serves as a Board member for not-for-profit industry associations. He is a frequent speaker on behavioral economics, analytics, and technology topics in academic and trade forums.

An expert in his field, Anand will be attending this year’s AI Summit San Francisco. In our interview, we were lucky enough to gain Anand’s exclusive insights into PwC’s AI market research, the challenges associated with defining AI, and how businesses can prioritise data privacy and security – as well as an excellent infographic detailing PwC’s approach to defining AI. 

Leveraging AI for growth and transformation

“Businesses will benefit from AI in two fundamental ways,” Anand argues. He explains that there are two major consequences stemming from the wealth of data that has been generated by increased instrumentation and digitization of commerce. “Firstly, digitization helps us to standardize and simplify business and decision processes that leads to more automation and increased efficiencies / productivity. Secondly, digitization and data also lead to greater personalization of products and services resulting in better customer experience, more effective decisions, and increased margins and profitability.”

“High value AI is all about eliminating simple manual tasks from a job description, and supplying people with better tools to act on the most complex and high-value issues.”

AI will become a catalyst for innovation in the global marketplace—that’s not a matter of ‘if’, but ‘when’. This claim is supported by a recent survey of executives and CEOs, who believe AI, IoT, and robotics technologies to be key drivers of global business transformation in the next three years. However, as PwC’s research indicates, businesses will not only become more efficient—the nature of work itself could change. “AI will reduce the extent to which workers spend their time on simple, manual tasks, enabling the workforce to focus on more complex and creative pursuits,” Anand says.

AI will furthermore augment these creative, innovative activities. “There are AI-enabled programs that compose songs, make movie trailers, and write news content. They can now recognize the style of a painting, or the mood of a song. They can recreate masterpieces or suggest songs based on our moods or create trailers using only the movie. As AI moves into the creative process, humans will be challenged to push their own creativity.”

However, Anand believes that there is still a lot of work to do in terms of implementing AI across the board. “While current technologies have come a long way in providing company decisionmakers with actionable insights, there is still a fair amount of tasks that can either be done by AI, or improved significantly by reducing the degree to which human judgement alone can skew results.”

“Business leaders with access to better insights into market trends, the true needs of their customers, or supply chain risks, will trump their competitors. AI is the set of capabilities that can make this happen. Businesses should not consider whether or not to invest in AI, they must consider when.”

 

PwC’s Global AI Study outlines the sectors likely to see the most rapid changes thanks to AI over the next 3 years: healthcare, finance, and automotive; with further impacts in transportation and logistics, retail, tech and comms, and energy. Anand points out, however, that the group of technologies offers “significant potential” for competitive advantages in specific areas within other sectors, such as on-demand manufacturing and sharper content targeting within entertainment.

However, it is the financial services sector which is most primed for the short-term impact of AI. “Financial services have been disrupted significantly by the digital revolution, and further innovation from AI is an expected second act,” Anand says.

“With increased digitization of records—including trading data, credit indicators, and spending habits, among others—comes standardization. Given this digitized and standardized data phenomenon in finance, many companies in the sector were ready to experiment with AI applications as soon as they became available.”

In our research, we observed many instances of AI being successfully used in financial services today—from AI that crafts custom loan features and terms based on untraditional credit-worthiness indicators, to customer service sales monitoring that detects customer emotion and recommends best actions for the representative to take. Many AI applications are mature in this sector, and executives exhibit an appetite for more. While financial services are primed for this evolution of digitization to standardization to personalization in the short term, every industry will follow a similar path over time.”

PwC: defining AI for the modern business landscape

“As Artificial Intelligence is actually quite an old field of study, its definition means different things to different people. Many people think of AI and automation as synonymous, which we believe does not consider the full range of AI’s potential,” Anand argues. PwC offer the following definition of AI, which Anand believes to be broader and simpler than those commonly used:

“AI exists in instances where machines can sense, think, or act.”

An infographic by PwC - defining AI

Data for personalization: a fair trade?

 

Data privacy, transparency, and security remains a hotly-contested topic within the field. With the outsourcing of training data models increasing, are consumers right to worry about how their data is being used? “While there exist very real concerns on the part of consumers and advocacy groups about how data is collected, used, stored or disseminated, the enhanced personalization and utility this data offers consumers is less prominent in the media,” Anand argues.

“Data availability at scale and specificity underpins the successful deployment of AI. Without data on the individual customer journey for the product in question, companies can only make educated guesses on how to craft an experience that will maximize customer satisfaction by improving personalization, utility, and consistency of experience, and enabling time savings. We believe that if consumers perceive the right value exchange, they would be willing to share the data for specific purposes.”

“Companies would do well to be more transparent about their data management process with consumers and regulators, and highlight the ways in which data collection has led to more valuable products and services for consumers. This, coupled with robust data management policies, will lessen the tensions surrounding data protection.”

As AI methods become more sophisticated, the need for a scattergun approach to consumer data lessens. Could this improve transparency and data protection? “AI techniques are evolving to make use of less data in order to learn, and also synthesize variations of data for better learning. In addition, there are a number of areas of AI that do not rely on large volumes of data, but rather encode known human expertise that will continue to be exploited.” This could assuage consumer fears about the extent to which their data is being used.

“Companies would do well to be more transparent about their data management process with consumers and regulators, and highlight the ways in which data collection has led to more valuable products and services for consumers. This, coupled with robust data management policies, will lessen the tensions surrounding data protection.”

China and North America: Ripe For Disruption

The Global AI study predicts that North America and China will experience the highest economic gains as a result of AI. “AI will specifically enhance GDP by 26.1% in China and 14.1% in North America by 2030—equivalent to a total of $10.7 trillion and accounting for almost 70% of the global impact,” Anand explains.

“In North America, a combination of readiness for adoption and strong potential for automation and augmentation of jobs reflect the region’s leading stance on AI and its implementation that is expected to occur between now and 2030.”

Meanwhile, in China, a high estimated marginal impact of AI-uptake on productivity is expected to be the largest driver of growth in one of the world’s largest regional markets. This, Anand argues, will “likely reflect the region’s low starting labour productivity base relative to other countries and the recent push to implement both replacement and augmenting AI technologies on a large scale.”

Looking forward: the AI Summit San Francisco

“The AI Summit series has provided many opportunities for our PwC AI and industry experts to connect with leaders seeking to translate AI technological developments into actionable strategies tailored to their organizational needs.”

“PwC’s broad set of capabilities allows us to provide a diverse set of solutions for leaders looking to proactively exploit the promises of AI. Our global firm offers new-to-market AI strategy services for those seeking to identify the most attractive and feasible applications of AI, as well as myriad solutions to known challenges leveraging AI techniques.”

“Our team has experience working with drones; image, audio, and emotion recognition; and machine and deep learning across functions and sectors. In addition to helping companies harness the power of AI, PwC also stands alongside them in ensuring these initiatives keep trust and transparency at the forefront. We look forward to conversations with current and prospective clients to discuss the emerging opportunities and threats for their businesses, and the chance to illustrate the many ways PwC is uniquely equipped to help.”

You can catch PwC’s market-leading expertise at The AI Summit San Francisco later this month, where CTO Chris Curran will be delivering a keynote speech entitled ‘Exploration or Value Creation? How enterprises can reap the benefits of AI & Emerging Tech’

 

PWC