Recently, BlackRock Inc., the world’s largest asset manager with $5.1 trillion in total assets, announced that it would be putting a greater emphasis on computer models to guide investment of their actively managed equities business. Or, as the Wall Street Journal put it, favor computers over humans. While Terminator-esque dystopian futures are likely still a way off, there is no denying that artificial intelligence (AI) is shaping the next industrial revolution and will be reshaping the global economy in our lifetimes.
We at Lloyd Group have all been fascinated as Uber et al. strive to put driverless cars on the roads, watched in wonder as IBM’s Watson took on the best Jeopardy had to offer, and now is helping H&R Block come to terms with the US tax code. But AI has had more practical advances that can be seen much closer to home as well. Take our phones, for example - the speech recognition that drives Apple’s Siri and Amazon’s Alexa has gone from 95% accurate a few years ago, a frustrating end-user experience that severely limited its adoption, to over 99% accuracy now and these applications are seeing over 100% year to year growth.
These exciting times do not come without some potential downsides as well. Between business analytics, machine learning, and self-learning robots, we are likely moving into an era where many professions will be completely replaced by new technologies. As this occurs, the impetus will be on both the public and private sectors to invest heavily in recognizing the business opportunities AI will bring about. The Chief AI Officer will soon have a seat at the board table and recruiting AI talent will move to the forefront of human resource challenges. Companies like Google and Baidu are already developing revenue streams as a result of their AI offerings.
What does this mean for the Lloyd community? Likely, it means smarter technologies that help our performance. AI provides analysis faster than the average human, allowing us to make quicker decisions and spot inefficiencies before they have a negative impact on our business. An area of particular interest to us that AI will likely have a heavy influence in is cybersecurity. The highest ranked cybersecurity solutions are already incorporating some type of “self-learning” technology, which look at activity and trends on our internal networks and tell us when there is unusual behavior. The continued advancement in this field is something our Solutions team is watching as they evaluate new and existing vendors and products.
A few years ago, we began to speak frequently of the “promise of the cloud”; reduced infrastructure investment and maintenance costs, all files available anywhere on any device, the ability to focus more on what your business DOES and not on what it NEEDS. The hype then gave way to an era of development where innovators battled to form the standards needed for these platforms to become part of the universal nomenclature. AI is starting to come out of that “Winter” and we are now beginning to see what its “Spring” will birth.