Updated: Oct 6, 2020
Artificial Intelligence – What and Why?
Artificial Intelligence is more commonly referred to as AI. It is a theory that emphasizes the development of computer systems that can perform tasks which usually require human intelligence such as visual perception, speech recognition, decision-making, translation, and learning. AI has the capability to analyze the data produced by IoT, social media, mobile phones, and other sources to provide active learning analytics.
A few decades ago, AI was just an obscure term for many, but today it is all around us. We use it throughout the day - may it be your Google assistant or your Apple’s Siri, they all use the existing applications of AI.
We have now extended our outreach to the stage of massive technological advancements. And we are witnessing the transformation in every non-digital sector of the economy - may it be education, healthcare, transportation and beyond. The artificial intelligence is revolutionizing the world at a fast pace and the nations like UAE are already at the forefront in the adoption of AI. The tech revolution happening in the Middle East is ferocious. The region is utilizing every opportunity to plunge its way in adoption of AI technologies and trends.
Why AI is a great investment in UAE?
Recent research by Accenture has revealed that the AI has the potential to boost the economic growth of U.A.E by 1.6 percentage points, adding $182 billion to the national economy by 2035. The report was stipulated by examining the impact of using AI on 15 different industries in U.A.E. and 13 in Saudi Arabia.
As per the findings following key aspects were highlighted which could be accomplished due to the growth in AI :
· A major impact would be witnessed in the financial service sector
· The healthcare, transport and storage industries will witness the growth of $37 billion, $22 billion and $19 billion, respectively, in their annual gross value added (GVA)
· The labor-intensive sectors such as education and construction will witness the growth by $6 billion and $8 billion in GVA respectively.
· Meanwhile, in Saudi Arabia, AI is expected to increase GVA by $215 billion.
Moreover, the financial sector of the UAE is making it to the top of the list due to AI led growth and the banking executives around the globe have already started taking actions to transform their businesses through the use of AI.
The report has also emphasized five key strategies to be considered when looking to implement AI:
· Growing the local talent pipeline using AI.
· Advocating for a code of ethics for AI.
· Becoming the global testbed for social AI.
· Preparing the next generation of workers for the AI future.
· And minimizing the impact of labor market dislocation.
The findings pose the new emerging face of UAE, as it looks forward to AI - breaking away from its decades of long dependence upon oil revenues. In order to acquire the benefits of this powerful technology, last year UAE also revealed an AI strategy that largely aims to speed up the government’s productivity and improve the performance of all official departments.
To agree to the exceptional economic growth led by artificial intelligence, Mr. Amr El Saadani, managing director of Accenture's Financial Services practice in the Middle East and Turkey has stated that, "The level of growth that AI stands to bring to the U.A.E.'s economy is unparalleled.”
How is UAE Edging towards in the AI Technology?
Including AI in its long-term strategic plans, UAE's government took a significant step by appointing Omar bin Sultan Al Olama as the first Minister of State for AI in October 2017 to lead the development of its AI strategies.
Taking initiatives and demonstrating its commitment to AI, the government has identified the following sectors in which it plans to implement AI technology:
· The Comae Technologies in collaboration with the Dubai Police is developing AI-based forensics solutions.
· Alpha Systems Group is developing an autonomous digital mobile booth that is designed to replicate a doctor’s surgeries.
Within the UAE, the emirate of Dubai has already taken a leap ahead by introducing the following AI driven smart technologies:
· Introduction of robocops with an intent to transform nearly 25% of its patrolling taskforce to robots by 2030.
· The emirate has also started testing the world’s first autonomous taxi-pods.
Meanwhile, Saudi Arabia recently awarded its robot with the citizenship, embracing the AI with both arms as it develops its non-oil economy.
Pioneering change -AI’s role in the upliftment of fintech in UAE
The KPMG’s annual UAE banking perspectives report reveals - the UAE is again set to take a leap ahead by integrating artificial Intelligence, blockchain and FinTech technologies in the banking sector to transform them into robust financial institutions. Implementation of these technologies is going to change the way in which the banks operate and help them achieve cost optimization. According to the report, these are the few predictable revolutionary innovations :
· Robotic process automation can be combined with AI to differentiate customer engagement.
· Some banks are even exploring automated decision-making based on sentiment analysis by extracting data from millions of emails and other data sources.
The report also highlights that the implementation of blockchain applications could help in achieving these three objectives –
· Improvement in overall operational efficiency.
· The increment in the revenue.
· Mitigating the risks associated.
The introduction of new laws and regulations along with the implications of the VAT are encouraging the UAE banks to embrace technological innovation as well as use it to engage with customers in new and unique ways. The KPMG UAE banking perspectives 2018 report examined each of these factors against an evolving backdrop of –
· Incorporating cybersecurity
· Corporate governance and presenting the road ahead for the next nine months.
The report also stressed upon formalizing the response strategies of UAE banks to achieve customer satisfaction and considering investing in cyber security so that the customer's trust is not subverted in any situation. It also fortified that a strong and a positive corporate culture will go a long way to help banks manage regulatory and innovation challenges in 2018. The last year has witnessed the increasing emergence of the disruptive banking sector. Still, the sector continued to exceed a wider UAE economy in 2017, hence it achieved a total growth in assets of the top ten banks by 5%. The banks have even attained a better shape as compared to how it was a year ago, in terms of having a more long-term, being ethical and thus providing more trustworthy culture.
How AI Boosting Fintech
While the AI-powered machines creating a boom in the middle east region, let’s explore how the AI can be incorporated into the financial services.
The following are some examples of how AI can play a significant role in financial services:
· Wealth Management for Masses (e.g. Smart Wallets, Trading)
· Customer Support, Transactions, and Helpdesks
· Data Analysis and Advanced Analytics
· Fraud Detections and Repetitive Tasks
· Underwriting Loans and Insurance
· Automated Virtual Assistants
The applications of AI in FinTech are limitless. The evolution of a cohesive and flexible BFSI industry serves all stakeholders efficiently, and its significance for the region are exemplary. With the booming of AI in the UAE, financial institutions have started investments in internal innovation and disruptive technologies that compete with traditional methods in delivering financial services. As a result, the number of fintech startups in the UAE has doubled to 43 during the last two years with cryptocurrency, crowdfunding, blockchain and e-payment brands such as OneGram, Beehive, Bridg, and Sarwa all vying for a slice of the ever-increasing financial technology market.
Moreover, Dubai is working on its ambition of becoming the first government in the world to execute all transactions using Blockchain technologies by 2020. It is all set to provoke more growth channeled by a Smart Bourse strategy which has already seen significant investment in financial technology initiatives that includes - the eIPO Platform, the iVESTOR Card for cash dividends, the Efsah system for company disclosures, and the eSAR report for the shareholder analysis.
UAE Strategy for Artificial Intelligence
In a bit to remain the top-notch player in AI over the major world economies, the UAE government revealed ‘UAE Strategy for Artificial Intelligence (AI)’ in October 2017. The initiative marked the post-mobile government phase which will rely on various future services, sectors and infrastructure projects. The strategy is first of its kind in the region and it aims to achieve the following goals :
· Achieving the objectives of UAE Centennial 2071.
· Boosting government performance at all levels.
· Using an integrated smart digital system that can overcome challenges and provide quick efficient solutions.
· Making UAE the first in the field of AI investments in various sectors.
· Creating a new vital market with a high economic value.
Specifically, the UAE's AI strategy covers development and application in the following nine sectors:
· Transportation - developing a preventive mechanism to reduce accidents and cut operational costs.
· Healthcare - to minimize the effects of chronic and dangerous diseases.
· Space – to assist in conducting accurate experiments and reducing the rate of costly mistakes.
· Renewable energy – in managing all facilities.
· Water-conducting analysis and studies to provide proper sources of water.
· Technology – accelerating increase in productivity and helping with general spending.
· Education – to reduce expenditure and escalate desire for education
· Environment – to increase the rate of afforestation.
· Traffic – to reduce accidents and traffic jams and bring in more effective traffic protocols.
The AI strategy also has five themes:
· The formation of the UAE AI Council.
· Conducting workshops, programmes, initiatives and field visits to government bodies.
· Development of capabilities and skills of all technical staff and organizing training courses for government all employees.
· Catering all services using AI and integrating it fully into the medical and security services.
· Launching leadership strategies and issuing a government law on the safe use of AI.
UAE will lead the global center of AI by 2030
AI will have a significant impact on the economy of UAE as it continues to show signs of audacious shifts in the rule of law to make innovation and investment in artificial intelligence. Given the speeds at which AI technology is progressing and the region’s overwhelmingly the young and tech-savvy population - it is certain that the significant economic benefits that will be reaped from AI will far outreach any societal concerns. The emerging government focus on AI combined with its size which creates a strong potential for the country to become an AI leader in the region by attracting the right investment. The country’s existing Research and Development infrastructure is combined with the ease of doing business. And with the overall readiness of consumers to adopt AI, this allows it to attract considerable investment in AI-based technologies. The resulting push towards AI from the government is able to attract implies that the short-term gains from AI are potentially larger in the UAE as compared to the rest of the region.
UAE is ready to position itself as the hub for innovation and technology in finance, covering artificial intelligence, machine learning, the blockchain, cybersecurity, regulation, and other challenging developments. The Ministry of Economy of UAE assured its people that the economic impact of the country's investment in the technologies of the Fourth Generation of the Industrial Revolution - most notably artificial intelligence, AI, will not be restricted by cost, consumption, production or productivity. This will also achieve major economic growth through smart investment in various sectors. Based on many international studies, it is predicted that the UAE will become the global center of AI by 2030.
According to the various international studies, AI technologies will increase the country’s GDP by 35 percent by 2031, thus reducing the government’s annual spending by 50 percent. This will also reduce the number of paper-based transactions and save millions of hours that are wasted annually when completing these transactions. The report also predicted that the UAE’s AI strategy will generate an annual return of around AED22 billion, in many sectors by raising individual productivity by 13 percent, saving 396 million hours annually from commuting. These are the sectors with expected significant results:
· Reducing transportation costs by 44 percent, which is equivalent to AED900 million, limiting carbon emissions and environmental pollution by 12 percent, which is equivalent to AED5.1 billion,
· Minimizing traffic accidents and their apparent losses by 12 percent, which will save AED2 billion annually,
· Lowering the need for parking spaces by 20 percent, and saving AED18 billion by raising the efficiency of the transportation sector in Dubai by 2030.
The report also certain that the UAE will not only benefit from the development of AI, in terms of improving project performance but also in terms of reducing the number of outside labors required. Thus this will balance the structure of population and job market, which will reduce the value of monetary transfers sent abroad from the country's economy.
Still holding deep, UAE is one of the most prepared countries in the region to adopt AI technology because the government has already meticulously built technology infrastructure over the past two decades. The UAE was the first country in the region to adopt e-government services which quickly revolutionized into a Smart Government system in 2013. The strategies will complement and build on the already established Smart Government to achieve overall growth in all areas of government and to improve overall institutional performance in all sectors.
Endless opportunities ahead...
AI has the potential to bring upon the significant changes in the markets of UAE through the creation of innovative new services and entirely new business models. With the introduction of AI, some of the market leaders in the coming years might be the companies which you have never even heard about. Upcoming market leaders are likely to explore the possibilities and setting their strategies today. In the current storyline, the region is all set to take their leading cut on AI and invest $320 billion into the region. If governments and businesses keep on grooming AI to its fullest extent, then there are much more endless opportunities waiting ahead.