Impact of Artificial Intelligence in the Business World

Impact of Artificial Intelligence in the Business World

Introduction

Artificial intelligence is a broad-based branch of computer science that enables the creation of machines that mimic human intelligence in processing, analyzing, making decisions, and performing other tasks. Over several years artificial intelligence has been associated with science fiction, but the concept is now widely used in our day to day lives.   The major branches of artificial intelligence that are commonly used in our daily lives are fuzzy logic, robotics, machine learning, deep learning, natural language processing, and expert systems. Various sectors in the business world use artificial intelligence to carry out activities such as personalized advertising and marketing, solving cybersecurity issues and detection of other frauds, improving customer service, carrying out analysis of consumer behavior, and future trends. Through these functions, artificial intelligence is impacting and will continue revolutionizing the business world.

Fraud Detection

With the increase in global online transactions, cases of improper payments, money laundering, abuse, and waste of firms’ finances and funding of crimes such as terrorism have ballooned and continue to lead to losses in businesses and individuals. In the past, organizations resulted in using basic strategies and business rules to counter fraud, but this has not yielded much since the firms cannot monitor crimes being done in real-time. Security company McAfee in its recent report, suggested that cybercrime costs the world economy $600 billion, which amounts to 0.8 % of global domestic product (Mishra, 2020). Through monitoring and cross-referencing of data online, artificial intelligence has aided in the detection of cybercrimes. One of the areas where artificial intelligence strategies are being utilized to counter fraud is in the use of payment cards. Payment card transaction is used by virtually by all business entities in the world and thus have become the preferred avenues for cybercrime. Since the use of payment card use started in the 1950s, cardholder data(CHD) has always been stolen by criminals and used to acquire monies or fund illegal trades such as drug trafficking and terrorism. Several artificial intelligence strategies have, over the years, been devised to counter this menace but with limited success. Recent methods have had considerable success, but researchers are still pursuing effective ways to detect cybercrimes in real-time and thus stop them. New techniques have utilized decision trees, which are tree representation that aid decision making. Through feature extraction from the transactions carried out by a cardholder, decision trees can be constructed to show the probability that the owner of the card has authorized use of the card or not (Ryman-Tubb, et al., 2018). Each decision tree is a weak predictor, but a combination of the decision trees creates a bigger feature space, thus improving the efficiency of detecting a cybercrime real-time.

Artificial Intelligence in Marketing

Artificial intelligence technologies have helped marketing managers improve their traditional marketing strategies by aiding market research, social media influence, and customizing consumer experiences and needs. The provision of artificial intelligence services such as image processing and fingerprint have revolutionized security and privacy needs to people and organizations. (Wirth, 2018).Artificial intelligence has also enabled business entities to reap the benefits of digital marketing. Through machine learning, organizations can integrate all the data online users leave on the internet. This data can be used to predict the interests of individuals or groups of individuals and thus help create digital marketing profiles for specific clientele (Murgai, 2018). Businesses are also utilizing artificial intelligence aided predictive marketing by analyzing information left by individuals browsing the internet. From that information, business predicts the information needs of the individual and thus can package their marketing message in line with predicted consumer needs. Artificial intelligence has helped business firms integrate analytics into traditional marketing strategies, thus gaining a competitive edge and ensuring that the marketing message is versed with consumer needs.

Artificial Intelligence in the Financial Sector

Artificial intelligence is being used by banks and other financial institutions to ease transactions and improve customer service. The chatbot is one of the major revolutions in the banking industry. A chatbot is an artificial intelligence program that mimics human communication by using methods such as natural language processing and image and video processing (Patil & Kulkarni, 2019). The chatbox has allowed efficient handling of previously tedious customer requests such as balance inquiries, loan inquiries, and bank account details inquiries. Chatbots have enabled banks the opportunity to redirect their customer service staff to other tasks. Amazon Alexa chatbot and Siri chatbots have replaced the 24-hour customer care staff in financial organizations and other business institutions. Chatbots, however, are prone to web attacks, and thus they need further improvements in their security systems.

Artificial Intelligence in Supply Chain Management

Supply chain managers have taken to artificial intelligence strategies to have a competitive intensity in the market and to counter supply risk. Artificial intelligence has given the power to organizations to utilize consumer data to improve the various elements of the supply chain. Genetic algorithms and expert systems subdisciplines of AI are used by supply chain managers to improve on scheduling, location planning, inventory management, and purchasing hence improving efficiency. For example, for a company to maintain inventory at a low cost while meeting consumer demand, real-time information about consumer demands should be availed (Min, 2010) . Expert systems have improved efficiency at inventory control and prompt decision making about consumer demand while also dealing effectively with unexpected situations. Expert systems have successfully carried out this efficient inventory by enabling that decisions are solely made using real-time data on consumer demands.

Disadvantages of Artificial Intelligence

Despite the positive impact of artificial intelligence in business, there are also negative impacts of these inventions. One significant negative impact of AI has been the loss of jobs. Jobs that were previously done by humans have now been taken by intelligent machines. Chatbots have to lead to massive job cuts in the banking sector, where customer service jobs have been taken over by these intelligent machines (Patil & Kulkarni, 2019) . Driving jobs are under threat as self-driven vehicles are being manufactured and thought to be central to the immediate future transport systems (John, 2013) Development of artificial intelligence systems have cost businesses organizations billions of money to set up.

Conclusions

Artificial intelligence has revolutionized various sectors in the business world with varying effects. Businesses have improved efficiency in their operations, thus making marked improvements in the profit margins. Business owners, despite having spent heavily on setting up artificial intelligence infrastructure, have eventually enjoyed lower costs of production through cutting on labor costs. Employees are the biggest losers of AI, as many human jobs have been taken over by intelligent machines.

References

John, H., 2013. Advantages and Disadvantages of Artificial Intelligence. [Online]
Available at: https://ai4beginners.com/advantages-and-disadvantages-of-artificial-intelligence/

Min, H., 2010. Artificial intelligence in supply chain management: theory and Applications. International Journal of Logistics: Research and Applications, Volume 13, pp. 13-39.

Mishra, P., 2020. How AI helps in Fraud Detection?, s.l.: s.n.

Murgai, A., 2018. Transforming Digital Marketing with Artificial Intelligence. International Journal of Latest Technology in Engineering, Management & Applied Science, 8(4), pp. 259-262.

Patil, K. & Kulkarni, M. S., 2019. Artificial Intelligence in Financial Services:Customer Chatbot Advisor Adoption. International Journal of Innovative Technology and Exploring Engineering (IJITEE), 9(1).

Ryman-Tubb, N. F., Krause, P. & Garn, W., 2018. How Artificial Intelligence and machine learning research impacts payment card fraud detection: A survey and industry benchmark. Engineering Applications of Artificial Intelligence, Volume 76, pp. 130-157.

Wirth, N., 2018. Hello marketing, what can artificial intelligence help you with?. International journal of Market Research, 60(5), pp. 435-438.

 

 

 

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