Artificial Intelligence (AI) has been one of the hottest topics in customer experience (CX) this year. To find out more about some of the trends and challenges within the fast-growing sector, Fifth Quadrant spoke to Dr Catriona Wallace, Founder and CEO of AI fintech company Flamingo Ai (ASX:FGO).
FQ: What have been some of the important trends in AI in 2018?
CW: The greatest level of interest in AI is two areas: one is robotics process and automation (RPA), the second is chatbots or cognitive virtual assistants. Those would be the two strong growth areas.
FQ: And your focus is on the latter?
CW: We are involved with cognitive virtual assistants but we have also just partnered with a very strong company in the RPA field called EXL Service (NASDAQ:EXLS).
FQ: Can you tell me a bit more about that?
CW: We have a global partnership with EXL, who are experts at RPA and analytics, particularly for the financial services sector. They provide the operations and the RPA, we provide the conversational AI layer on top of that.
More recently we have also got into analytics, using Flamingo Ai's machine learning capabilities for large unstructured data sets. This is now what we see as a growing area of interest in Australia as well as the US. Companies using machine learning to analyse a lot of their conversational or unstructured data that previously wasn’t used very effectively.
FQ: What are the greatest challenges organisations are facing to integrate AI?
CW: Organisations are still extremely conservative and risk adverse so there is a huge amount of security, data privacy issues AI needs to go through before it can be integrated by large enterprises. And it is also a process of these organisations understanding what AI can do for them – something that is picking up pace now.
FQ: Are you referring to the US or Australian market or both?
CW: Definitely both. The Australian market is, I think, two years behind the US market with regards to their appetite for AI. But one of the things we know will have an impact here is the Royal Commission, which has brought up a real challenge around trust of large enterprises. That trust equation can really be addressed using AI going forward.
FQ: I see you have just signed a contract with CUA Health – so there are domestic companies adopting this technology.
CW: Yes. The banks are probably some of the leaders for using AI. Most of them already use it in their operations and are now starting to take it to the front. We are extremely impressed with CUA, Australia’s largest credit union. They have a very good philosophy around ‘digital with a human touch’. So machines augmenting humans, but with the humans still being important. We will also see some of these smaller challenger brands outpacing some of the large banks when it comes to the uptake of AI.
FQ: Let’s say a new client signs on, how long does it take them to integrate or use your technology?
CW: It depends on the product. If it was 'Libby', the assistant that analyses large amounts of data, within four weeks. 'Maggie', our virtual knowledge assistant can be up between a few days or weeks. For 'Riley', the virtual service assistant, it could be eight weeks. Finally for Rosie, which requires a deeper integration, it could be from two to four months.
FQ: Which of your target sectors are you seeing the most uptake in?
CW: We’ve have specialised in insurance and we are just moving into the banking sector and now have a huge pipeline for both of these sectors. Now we have proven with CUA that health insurance can be sold with virtual assistance, we are going to make a strong play in the healthcare sector as well.
FQ: I note ‘Sam’ is your health insurance bot. Is this your first ‘male’ bot? I guess in 2018 I shouldn’t assume Sam’s gender.
CW: Well “he” is asexual. CUA purposely choose Sam as it is a gender neutral name.
FQ: But virtual assistants are often female. Take Siri and Alexa for example. Do you think that is an issue?
CW: I don’t, and I say that as a feminist. Firstly, I think it is ridiculous that we name these machines after humans anyway, as they are not human. We only give them names to put people at ease due to a perception that is largely driven by Hollywood’s presentation of robots. Using a young female’s name creates a less threatening persona. Some people may say that oppresses women, I take a different view. I think it is a powerful statement about female characteristics as being non-threatening, smart, reliable and able to guide customers to a great outcome.
FQ: Switching gears a bit, how do your products improve CX and EX as well?
CW: Let me start with employee experience (EX). We are about to bring to market a product that it is internal knowledge assistant which is able to ingest a company’s data and use one of our virtual assistants, typically Maggie, to do the enquiry. So customer service reps or sale assistants can ask Maggie questions about a product or pricing. Maggie becomes their buddy to support them with knowledge, improving efficiencies and empowering employees to better serve customers.
FQ: And CX?
CW: On the CX side it is around providing immediate support to customers 24/7 when they are wanting to purchase something, make an enquiry or be served. The virtual assistants can do that automatically at any time. They are also programmed to be consistent, reliable and unable to say the wrong thing.
FQ: Are you seeing any demographic differences? For example, do millennials prefer dealing with chatbots over, say, baby boomers?
CW: No. In all of their work there is no statistical demographic difference in the users of virtual assistants, which is surprising.
FQ: About a year ago, we chatted about Judgment Day and the possibility of AI taking over the world. Is AI advancing at the pace you expect, or is it moving faster or slower?
CW: It is advancing at the speed I expect, which is fast. AI is the fastest-growing tech sector in the world and it is now around $7.3 billion dollars being invested into it and that will increase 12 fold in the next five years up to $90bn. It is going to massively grow and the speed at which it advances will catch a number of organisations by surprise.
Regarding Judgment Day, we are seeing regulations with regards to military weapons. Self-driving cars is another area we will need to make a decision about soon. I have just come out of a meeting with the Human Rights Commission, which is placing a very strong agenda around the impact of technology on human rights.
FQ: And how is Australia doing with regards to adoption?
CW: The fear I have for Australia is that it needs to step up to the plate on this and start testing, learning, trialling and doing much more than we are or we will get left behind. China is the largest AI country in the world, India is second largest, then the US. Canada interestingly is also a super advanced AI country and Australia is well down the ladder.
FQ: Do you think that will come from government initiatives or mostly the private sector?
CW: Government will be fairly ineffectual. Where it will come from is the private sector which is starting to realise that using the existing model it is very hard to achieve growth. What we are seeing is a new hybrid model of human and machines which will power the next big surge in growth. We would expect that to really hit its stride by 2021. Between now and then Australian organisations should be looking at how they can use AI to improve CX and EX and drive efficiencies and, in turn, revenue growth.
*This interview was edited and condensed for clarity.