If you want to know why businesses are investing in artificial intelligence (AI) technology, ask John Stumpf, CEO of Wells Fargo, one of America’s largest banks. ‘I’m impressed with companies who take complexity and make it simple, who remove pain points… I think those are going to be the kind of things that will be big influences for us,’ he says.
Part of Wells Fargo’s push for simplicity is a smart digital assistant that lets customers ask their mobile banking app questions like ‘how much have I spent on fees?’ or ‘find me my last transaction in this store’ (the app works out which store you’re standing in when you ask).
Most banks expect customers to pick through your bank statements or phone up and ask for help. Wells Fargo is trying to remove that pain point through artificial intelligence.
Retail companies, too, are applying the technology at scale. Paul Clark, CTO of Ocado, is building an automated system for predicting orders and picking and delivering food with as little interaction as possible from humans – including customers. ‘Ocado is a time travel business. We give back our customers the time that they would have spent traipsing around a supermarket,’ says Clarke.
There’s always a competitive advantage in saving customers time and effort. It takes no more than a couple of minutes to Google a taxi company on your smartphone and call them to book a ride – but Uber lets you do the same thing more easily and in just a few seconds.
By successfully removing that small pain point Uber has rapidly grown to be worth $62 billion dollars.
The explosion of interest in AI hasn’t come about by chance. It’s a combination of two things: need and capability.
The need arises from our increasing dependence on smartphones. Every sector has seen a huge shift to mobile channels in the past five years. But mobile conversion rates remain stubbornly low compared to desktop. Customers prefer to use their smartphones but it’s just a little harder to get stuff done on a small screen in a distracting environment. AI tech makes it easier and quicker to complete a transaction by cutting down the number and complexity of steps.
With mobile predictive analytics firm Personetics reporting an average 25% response rate for in-context recommendations, it’s clear that smart technology will play a large part in developing next generation mobile experiences.
Meanwhile, the new capability comes both from hardware (today’s smartphones are as powerful as yesterday’s supercomputers) and software (new techniques, such as deep learning, and scalable, robust software that’s fit to deploy at enterprise scale). Along with Wells Fargo, firms such as Ikea, Vodafone, Scandinavian Airlines and Bosch have all been investing in AI technologies.
That combination of acute need and new capability mean that it’s now possible for companies to deploy AI solutions to millions of customers.
Among the biggest players in AI are Google, Apple, Amazon, and Facebook. Each of those companies sees an opportunity to create a smart interface between customers and businesses. The smart interface is where the customer relationship takes place and, usually, where the most business value is generated. If companies lose control, they will potentially become nothing more than ‘dumb pipes’.
JP Morgan CEO Jamie Dimon warns ‘They want to eat our lunch. Every one of them is going to try.;