In many industries, there’s been a massive drive towards incorporating AI, machine learning, and big data analysis to either streamline operations or to analyse users to determine potential purchasing behaviour. And South Africa is fast catching up. But while AI is already a reality for many businesses, the long-term impact of this technology is unknown. To find out the latest developments, and what they mean for the business landscape, we spoke to Fatima Ameer-Mia, Director in the Technology, Media, and Telecommunications practice of law firm Cliffe Dekker Hofmeyr.
What are the basic concepts of AI?
AI is usually defined as a computer or software system that uses algorithms to make it possible for machines to learn from experience, to adjust to new inputs, and to perform or simulate humanlike behaviour with tasks. Machine learning is a method of data analysis that automates analytical model building. It’s a branch of AI in which machines learn from data, identify patterns, and make decisions with minimal human interaction. Big data is typically defined as large and complex datasets – it can be structured or unstructured – that traditional data processing cannot analyse. Big data analysis finds ways to extract and analyse information computationally to reveal patterns, associations, and trends.
Where is all the data coming from?
A report by Cisco predicts that 60% of the world’s population will be using the internet by 2022 (up from 45% in 2017) and that smartphone traffic will exceed personal computer traffic. The report also predicts that internet traffic will be 85 gigabytes per user (up from 29 gigabytes in 2017) and that there will be 3.6 networked devices per person in 2022 (up from 2.4 in 2017), although it’s important to note that in North America the projection is that it will be 13.4 devices in 2022, whereas for us in Africa the projection is 1.4.
How is AI being used in South Africa?
Banking and financial institutions are increasingly using big datasets through AI-enabled technology to improve the analysis of clients by, for example, looking at their credit scores for loan considerations, to create value-added services, and to improve existing offerings. AI software is now able to use big data from a variety of online sources linked to a client, including from their social media accounts, to build risk profiles and better understand the way in which they may benefit from certain products. Insurance companies have also been using AI and big data to analyse a client’s behaviour, predict risk exposure, and create insurance models, which essentially address concerns that many clients have with regards to the industry’s lack of transparency on insurance premiums.
Fatima Ameer-Mia
What other industries are using this?
In the health tech industry, AI is enabling medical professionals to make faster and more accurate diagnoses, and also treat patients in remote or far-to-reach locations. Some of South Africa’s major medical insurers are also experimenting with big data analytical tools and chatbots, which use machine learning to create a more client-centric business model. They also allow members to connect information from their healthy habits (for example gym workouts and healthy food purchases) to get points and rewards (such as discounts on flights). There are also a number of entrepreneurial companies, which use AI and big data to assist lifestyle management of diseases such as diabetes and also to conduct genetic analysis. Meanwhile, in the Agri tech sector, there are a few companies using drone technology and AI, as well as machine learning and big data, to provide imagery of the crops to farmers. It interprets these images and other data to provide an analysis of the health of the crops and other trends.
How are companies responding to the trends?
We’ve seen a number of South African start-ups that are successfully using AI technology and machine learning. For example, one start-up focuses on developing AI that helps people work more effectively. It provides non-coding businesses with the opportunity to develop a virtual advisor app, which can provide business clients with detailed information about the products and services that the business offers, and can also be used to assist staff in taking particular decisions with regards to the business. There’s also another start-up that uses AI to assist companies within the manufacturing sector to eliminate defects in the factories and also to improve yield in production.
What are some of the concerns?
While South Africa is taking big strides in the AI industry, it’s not without its challenges. AI systems are expensive to implement in the short-term, so the cost is often a barrier that many businesses have to overcome. In the South African economy, where unemployment is rife, businesses looking to implement AI systems should also be mindful of AI replacing human jobs and negatively affecting the economy. But if it makes things more efficient, maybe it’s a good thing. It’s similar to the Industrial Revolution, which also replaced a lot of jobs that were typically done by humans. It was just the way the world was going. Right now, the world is changing and around 20% to 30% of jobs are at risk of automation but it’s not something which lawmakers have regulated. Our lawmakers might implement certain ratios or criteria for the use of AI but we will have to wait and see.
How can AI be a force for good in the workplace?
AI has the capability to reduce the workload of a director and make working and decision-making more efficient and arguably more cost-effective. For example, AI can scan and process large datasets in a due diligence exercise and highlight risks quicker than a human would ever be able to. The director would then have to interpret that output. In fact, the King Report (which is basically a voluntary set of principles for corporate governance) has a specific focus on the oversight of technology and information. And the board of directors is specifically tasked with proactively monitoring cyber incidents, and also ensuring that it has processes in place from a cybersecurity perspective. Failure to implement and mitigate these incidents would amount to a breach of a director’s duty under both common law and the Companies Act. So, despite the use of AI in a company, a director would still retain certain duties, and the possibility of ‘robo directors’ is not something that I think we’ll see in our lifetime.
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