When it comes to predicting the future, science-fiction writers seem to have a particular knack for visualising the possibilities. For example, Mark Twain essentially envisioned what would become the Internet as far back as 1898.

He wrote about something he called a telectroscope – essentially a dial-up connection – which allowed people to connect to a worldwide network via their phone lines, letting them see and hear information from all over the globe.

 

So when we think about science fiction and current scientific developments, ideas like self-driving cars, space travel and a public service staffed by robots could soon be part of our everyday lives, thanks to artificial intelligence.

 

What is artificial intelligence?

Artificial intelligence (AI) is the theory and development of computer systems which are able to perform tasks which normally require human intelligence, such as visual perception, speech recognition, decision making and translation.

 

AI usually consists of software algorithms, machine learning and neural networks which are able to learn and characterise behavioural patterns, analyse situations and predict what will happen in the future.

 

However, it is not just the stuff science fiction and horror films are made of. According to research, the annual economic growth rate can double in 2035 if the nature of work begins to change and a new relationship between people and intelligent machines arises.

This will increase productivity by up to 40%, while AI technologies will enable people to utilise their time more effectively and be innovative as routine tasks will be done by machines or robots.

 

Where is it used?

AI is already being used across a wide range of fields, ranging from medical diagnosis, electronic commerce, investment management, remote sensing and applied in industries such as finance, health care, education, transport and the media.

 

Ecsponent uses this

For Ecsponent, one of the most promising aspects of AI is the opportunity to involve more people in the financial field and thus contribute to economic growth and development.

 

About 1.7 billion people in the world do not have access to financial products or services, according to the Global Findex database of 2017.

 

The development of AI creates the opportunity to address the gap between banked and unbanked clients and improve financial inclusion in this way. In Africa most people have cell phones and mobile wallets. This creates opportunities for AI, such as credit provision, portfolio management and underwriting.

 

Credit as a catalyst for growth

One of the paradoxes in the financial system is that for credit to be granted successfully, applicants must produce a form of credit history.

 

In Africa however, cash is king, which means many transactions are never recorded and the credit profile of a person is often blank. Moreover applicants must supply a bank statement and proof of income with each application. Without this, credit cannot be granted. This leads to financial exclusion.

 

MyBucks SA, a Frankfurt-listed fintech company in which Ecsponent Limited holds a significant investment, has used AI very successfully to accelerate credit provision. According to MyBucks’ Chief Technology Officer, non-traditional data sources such as information on a person’s mobile phone is used to determine credit allocation.

 

Thousands of “features” which determine a person’s financial behaviour, can be extracted from a mobile phone. However, these “unrelated features” can be merged to make a credit allocation decision, based on the person’s previous loan behaviour. These include ordinary actions like when and how you buy mobile data, what your account balance is on the 5th day of a month, or how often you purchase fuel.

 

Unlock rural potential

This access to “irrelevant data” enables fintech companies to unlock the credit potential of previously ignored communities such as those in rural areas. It provides a helping hand to unbanked people to access economic opportunities, thereby contributing to growth in disadvantaged areas.

 

Origin of AI

 

“Artificial Intelligence” may sound futuristic, but the term had already been created in 1956. There is even reference to intelligent machines in Greek mythology. Development in AI technology has gained momentum over the past few years and like most technologies it is full of jargon. Here are some key terms:

 

  1. Artificial intelligence

Intelligent behaviour, commonly associated with people, but performed by machines.

 

  1. Machine learning

Machine learning is a field of artificial intelligence that uses statistical techniques to give computer systems the ability to “learn” from data, without being explicitly programmed.

 

  1. Natural language processing

It is a computer’s attempt to interpret written or spoken language.

 

  1. Robotic process automation

A Type of AI which teaches training software to mimic algorithms to determine how an employee will complete a specific task.

 

  1. Turing test

The Turing test, developed by Alan Turing in 1950, is a test of a machine’s ability to exhibit intelligent behavior equivalent to, or indistinguishable from, that of a human.