Misconceptions of Artificial Intelligence
Part 2: The Time to Integrate
By Shazia Manus, Chief Strategy and Business Development Officer, AdvantEdge Analytics
This post continues our series exploring three common artificial intelligence (AI) misconceptions that may be standing in the way of the technology’s potential to bring about meaningful change. (To review the first, see Part 1: Machines vs. Humans.) The second misconception we’re taking a closer look at is:
Misconception: AI is years down the road.
Truth: AI is already here.
Very few people expected autonomous vehicles would be possible by 2014. Yet, that was the year Google revealed its self-driving car prototype, a vehicle that ended up completing 2 million driverless miles by the end of 2017. From quantum computers to robotics, there are dozens of other technologies that have leapfrogged their way past expert predictions.
Antony Jenkins, digital banking expert and former Barclays CEO, has surmised that failed predictions about technology are rooted in the way society tends to overestimate new technology in the short term, yet underestimate it in the long term.
Research firm Gartner talks about the perception of a particular innovation’s value in much the same way, using its Hype Cycle to describe the phenomenon. In 2018, Gartner released its Hype Cycle report on AI. The firm’s analysts characterized solutions like AI developer toolkits and chatbots as “on the rise,” while advances like speech recognition and GPU acceleration were “entering the plateau.”
In a recent talk, Jenkins said, “We are at the end of the beginning of [the fintech] revolution.” His remarks underscore the truth that technologies like AI won’t be “new” for much longer, and the time to integrate is now.
The 263 credit union executives who responded to a 2018 AdvantEdge Analytics survey appear to agree. Fifty-seven percent do not believe AI is too futuristic for their organization. Another 65 percent either fully or slightly agree that AI is well-suited to the growth goals of their credit union.
It’s one thing to believe AI is the way forward; it’s quite another to put resources behind learning, and eventually integrating, the technology. This is especially true when the organization is a risk-averse not-for-profit. Credit unions can push past many of the cultural and practical roadblocks they face by adopting organizational ambidexterity. The transformative business philosophy calls on leaders to explore new opportunities while exploiting existing capabilities.
The new opportunities discovered do not have to be associated with major changes. According to Harvard Business Review, ambidextrous organizations consistently pursue incremental innovation. These are small improvements to existing products or operations, not complete alterations to the business model, value proposition or DNA of the organization. When we talk about integrating AI, for example, there are several incremental “firsts” to consider. Even the most autonomous AI solution needs a consistent diet of clean data. Gaining competency around data management, therefore, is perhaps the first place a credit union can begin.
Additionally, the uncovered possibilities do not need to be tackled in isolation. Credit unions are increasingly finding a wealth of fintech partners, both startup and incumbent, anxious to collaborate for at-scale delivery of new technology. The mutual benefit often results in accelerated growth.
Both profitability and performance stand a chance of increasing when traditional financial institutions and fintech firms come together. Credit unions deliver new value faster and for a smaller investment. Fintech firms scale up their business quicker thanks to the financial infrastructure, capital and access to a credit union’s member base. The mutual benefit is that each can focus on their core competencies, contributing uniquely per their areas of expertise.
Stay tuned for the third part in our series, which will explore the misconception that the cloud technologies required by AI are too risky.
To further separate fiction from truth when it comes to AI, download our latest white paper: How Humans and Machines Will Transform the Credit Union Industry.