Artificial intelligence: Fact or fiction

Breakthroughs in technology over recent decades have ranged from the World Wide Web and personal computers to wireless phones and now apps for everything; all transforming the world we all once knew. Oftentimes, new discoveries and advancements are met with skeptical thoughts.

For example, take a lookback at the Y2K phenomenon in 1999—when everyone thought all computers would crash as the clock struck midnight on January 1, 2000. There will always be hysteria around the unknown in technology advancements that are eerily similar to human intelligence.

Why it matters: As artificial intelligence continues to integrate into society, it is important to separate preconceived notions with the facts. Recognizing how and when to use AI as a tool can produce desired results (whether it is ChatGPT to make your grocery lists or a generated predictive model to help with your credit processes.)

Let’s take a look at four common misconceptions about artificial intelligence and facts to disprove each one:

1. “AI will replace my job”

Fact: AI can be used as a tool to aid in your everyday and mundane tasks to make processes more efficient. When using AI to handle repetitive tasks, it allows you to focus more of your time on strategic tasks and bigger projects. AI is designed to support human capabilities, not replace them.

Also, some jobs need a human’s touch for roles that involve relationship building. Most customers like to talk to a human rather than a chatbot about their issues or questions. “I think a better way to look at AI is that it leads to more fulfilling job roles and opportunities for personal growth,” said Danny Wheeler, invoice-to-cash manager at BlackLine. “It has the advantage of making teams more successful in their day-to-day work routine.”

2. “AI is only for people who work in tech”

Fact: Artificial intelligence can be used as a tool in any industry. Here are a few examples:

• Healthcare. Some companies in the healthcare industry will use web-based software to allow healthcare professionals to review EKG and heart sound measurements. The innovative software can also track people’s physical and mental condition by helping to spot the symptoms of cardiac diseases and strokes.
• Agriculture. Farm equipment, such as an automatic seeder use AI to enable them to plant, fertilize, harvest crops and monitor soil moisture levels to determine the necessity of watering them. Some companies even use pre-programmed drones powered by AI to watch fields and detect problems.
• Finance and banking. AI can help detect fraud and improve credit scoring for customers, making financial services both secure and efficient. Some credit professionals will also use AI to write emails to customers or even analyze credit applications and customer reports.

“There will always be a person who’s responsible for every underwriting engagement that’s undertaken between one business and another,” said David Fulham of Nuvo. “That is not going to go away even if the processes around it get more streamlined. It’s definitely a concern people have and they should maintain a philosophy of complete ownership of the process and outcome when they’re dealing with with credit decisions.”

3. “AI is a single technology”

Fact: Artificial intelligence is comprised of several technologies for different purposes. It can show up in many forms such as machine learning, deep learning or generative. Sometimes AI is used as a blanket term to categorize other areas of technology, such as machine learning and automation. “There is a technology renaissance happening, and AI is at the heart of it,” said Charles Edwards, CCE, vice president of credit operations at SRS Distribution, Inc. (McKinney, TX). “AI is a tool. It is inherently unbiased, but is requires knowledgeable people to ensure it is used responsibly. Like any tool, it can be misused.”

4. “AI is expensive and difficult to implement”

Fact: When AI first approached the scene, it was expensive and only available to larger organizations or well-funded research organizations. However, most businesses and organizations that can benefit from using AI do not have to train their own models from the ground up because most use third-party vendors. “Often, working with a vendor or company that specializes in an area that can utilize AI can significantly reduce the complexities and costs associated with development,” said Wheeler. “But the key to a successful AI implementation is making sure enough time has been spent understanding and identifying the right use cases.”

How expensive and difficult AI will be to implement depends on the scale and scope of the application. Just like most technologies, there is a wide range of prices and complexities. Many people think AI can make better credit decisions than a human, but the tool is only as good as the information it is provided. “AI can pull any information out but will also hallucinate, which means it can state wrong answers as if it is 100% correct,” said Srini Bharadwaj, head of digital transformation at ScryAI (San Jose, CA). “It can look for anomalies in payment patterns depending on the training data and bias that comes with it.”

The bottom line: Investing time in understanding the right use cases for AI implementation is key to its successful integration across various industries, ensuring efficiency and cost-effectiveness in leveraging this transformative technology.

Interested in learning more about AI? Be sure to register for NACM’s webinar about AI and the Future of Credit Management: Trends, Tools and Tactics on July 31.