Machine learning | Apr 25, 2018
Benefits of Machine Learning in different industries
What is Machine Learning?
Nowadays, we hear talk almost every day about facial-recognition technology, driverless cars and online recommendation offers. Tech giants, such as Apple, Google and Amazon, have turned these concepts into reality and are making huge progresses in order to rapidly improve the reliability of such services. We know that behind these recent developments there is the advance of Artificial Intelligence — and most specifically, Machine Learning. But do we all have clear in mind what Machine Learning is?
Machine Learning is a method of data analysis that allows computer programs to analyze big data, extract information automatically and learn from them, in order to identify future patterns with the minimum human intervention.
Machine Learning is not a brand new concept, as this term itself was coined back in 1959 by Arthur Samuel, an American pioneer of Artificial Intelligence research, that originally referred to this concept as “the field of study that gives computers the ability to learn without being explicitly programmed”.
However, the ability to mechanically apply complex mathematical calculations to big data is just a recent development, and nowadays Machine Learning plays a key role in industries such as transportation, oil and gas and healthcare.
How do these industries benefit from Machine Learning algorithms?
A part for the development of self-driving cars, the transportation industryis using Machine Learning to collect commuters and travelers’ data in order to predict potential problems and increase the efficiency of the routes, generating more profitability.
Thanks to Machine Learning, the oil and gas sector is now able to detect new energy sources and predict refinery sensor failures, coming up consequently with more cost-effective strategies. Because machines can analyze huge amounts of data, a lot of processes have now been automatized, resulting in a great amount of cost saving.
The healthcare area, from its side, is taking advantage of Machine Learning procedures to improve diagnoses and treatments, with the project of fighting diseases for which, until now, a cure has not been found yet.
In general, the ability of the recent Machine Learning technologies to analyze large amounts of clinical data can give make a great impact in the decision making process. Moreover, the use of predictive analytics with samples of the patients’ population can allow healthcare providers to take preventive actions, reducing health risks and saving superfluous costs.
How are financial services being improved with the help of Machine Learning?
Another industry that, because of Machine Learning, is experiencing major progresses, is the financial one.
Thanks to Natural Language Processing, a subset of Machine Learning that enables systems to understand language, banks can now provide a more efficient and rapid customer service through the use of chat bots and conversational interfaces, that can help clients make payments, manage their accounts and find answers to general questions in real time, without the need of waiting for an agent to make time for them.
The improved Machine Learning technology is now able to provide more targeted and personalized financial services. In fact, budget management apps provided with Machine Learning abilities can now offer highly customized financial advices, by tracking clients’ spending, interests and behaviors in a more precise way. There are certain algorithms in particular, that are called robo-advisors and are built to calibrate a financial portfolio to the goals and to the risk tolerance of a specific client. For this reason, they can provide a customized financial advice to every different customer, according to the target that each of them enters.
Another great improvement that Machine Learning has brought to the society, is the ability to detect and prevent fraud. In the years, the number of transactions that are made every day has increased significantly, and so have the payment methods that people can use.
Today, customers’ data have reached an amount that is practically impossible to be analyzed correctly by human beings. With the help of Machine Learning, systems can now detect any suspicious activity and behavior, and flag them for security teams.
According to a report published by Goldman Sachs in 2016, by 2025 Machine Learning and Artificial Intelligence will enable $34 billion to $43 billion in “cost savings and new revenue opportunities” within the financial sector.
What we want to focus our attention on, however, is how Machine Learning is playing a particularly significant role in the trading business.
How is Machine Learning bringing extra value to traders?
We know how hard it is for traders to collect all the necessary information and analyze them in the correct way to make a profit out of this activity. The needed data are possibly infinite and the study phase is endless. What if technology developed machines capable of doing all the dirty job for us, and we could simply enjoy the return of our investments, without any extra effort needed?
We know already, at this point, that Machine Learning algorithms are able to analyze huge quantities of historical data and to forecast the future trends. This means that ideally they can predict future stock prices better and more rapidly that even the smartest human being on Earth could do.
Moreover, Machine Learning can monitor a very large number of markets at the same time, while a person already encounters difficulties in analyzing one market, having to face the tradeoff between time efficiency and detail of his research.
Most importantly, the application of Machine Learning in the trade market would allow traders to finally say goodbye to what is probably considered as their worst enemy and that we call the “human factor”.
Most of the transactions and trading decisions are influenced by human feelings and anxiousness, and when a person gets nervous or excited about how its target company is going, the trading process in the relative stock market can flip in the opposite direction, and all the hours spent in researches and industry analysis can result just as useless in a blink of an eye.
Can you imagine your trading future with no more avoidable mistakes and losses due to your lack of attention and your incomplete researches?
Follow AITrading and see this dream taking shape with us.