New technologies for financial planning – AI
What is artificial intelligence (AI)?
Artificial intelligence (AI) is human-like intelligence that appears to learn, reason, plan and perceive. At the heart of AI are algorithms which are rules like;
“if this condition is true then execute the following instruction (code), else execute some other instruction.”
It is this apparent reasoning that gives it the appearance of intelligence.
Even a modest computer can execute millions of these algorithms almost instantly making artificial intelligence very powerful.
Artificial intelligence is regarded by some as a set of algorithms designed to a perform specific task like accept an online booking that would normally done by a human. Others regard AI as the ability of a “machine” to learn on its own, sometimes known as machine learning.
Machine learning and big data
Algorithms can examine data to extract trends and make predictions that can be invaluable to marketers, governments and the like. Imagine powerful computers executing billions of instructions on vast amounts of data.
The bigger the data the better the results and there have been some impressive advancements.
- IBM’s Watson beat the two most successful contestants the show Jeopardy had ever seen.
In February 2013, IBM announced that Watson software system’s first commercial application would be for utilization management decisions in lung cancer treatment at Memorial Sloan Kettering Cancer Center, New York City.
In 2013, Manoj Saxena, IBM Watson’s business chief said that 90% of nurses in the field who use Watson now follow its guidance.
- IBMs Deep Blue chess playing machine beat world champion Gary Kasparov. It did this with brute computing power looking at every possible move instantly.
- DeepCubeA can do the Rubik’s cube two seconds faster than any human.
- MIT have developed AI that can predict the development of breast cancer up to 5 years in advance.
- Netflix and Spotify use AI to predict and suggest shows you may be interested in.
- Amazon’s Alexa can converse in an almost normal manner, answering a wide range of questions. It can also be programmed by individual developers to perform specific tasks available to anyone with an Alexa device. See Finchat’s financial planning skill here.
Microsoft have invested $1 Billion into OpenAI which is a “generally intelligent” system. Computers are very good at specific tasks but are no match for humans at applying knowledge.
How could financial planning use this technology?
“Robo advice” has already arrived for investment services and will expand beyond this. Amazon’s Alexa allows developers to build skills and Finchat has a financial planning skill using their cloud services you can access here.