Retail
Chronicles Monthly Newsletter | Volume 6 | Issue 1 | January 2021
CONTENTS 03
DO WE NEED A REFRESH OR RESTART BUTTON? As the world is currently getting off the hangover that 2020 left behind, should the year 2021 be our new ray of hope?
06 T H E A I D R I V E The implementation of AI in the auto industry has truly revolutionized the sector. However, with these changes come some shortcomings as well.
10 A I
IN FINANCIAL SERVICES
Most AI bots are female and AI is estimated to kill 6% jobs by 2021.
14
AI IN TRANSPORTATION AND LOGISTICS AI has completely changed the functioning of transportation and logistics with robots and machinery.
WRITERS Nithin B | Riya Shah | Shikha | Prasoon Gupta |
SENIOR DESIGN TEAM Ayush Goyal | Jeet Doshi | Pushpak Holani | Shikhar Gupta |
JUNIOR DESIGN TEAM Nilesh Agarwal | Prachi Sharma | Prashant Sihag | Abhishek Kulkarni | Shivani Kunkolienkar | Sneha Patel |
EDITING TEAM Abhishek Wakode
DO WE NEED A REFRESH OR RESET BUTTON? Retail Chronicles | Page 3
NITHIN B
January, 2021
End not only signifies the accomplishment of things, but also of the new beginnings. How unpleasant the past might be, it can never define our future. Remembering that the only constant in life is Change, let us welcome the new year filled with the promises of a brighter tomorrow. What does the new year means to us? Why does the start of the new year carry such special significance? Why not the other days? Astronomically, it is the time where our earth is closest to the sun. Isn’t it the best reason to draw inspiration from someone who consumes himself to give light to the others? Every morning we are born again, every year gives us a chance to re-assess ourselves, reminds us of the path travelled so far and yet to travel. Why resolutions? New year’s resolutions push people to be the better version of themselves. Committing to the promises made, at least for a moment, gives us a feeling of more control over the uncertain days to come, even if the resolutions aren’t brought into action.
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2020 was the year which often reminded us of the Darwin’s theory of Struggle for Existence. The curtailment of freedom, confinement within the walls with negative being the only positive thing, the scale of upheavals everyone underwent was traumatizing to the core. In this era of unique and unprecedented challenges, let us vow to inculcate things that brings meaning to our lives. Re-inventing ourselves The year 2021 holds a special significance in our lives, as the world hopes to make transition from the turbulence to tranquillity. It’s time to unbox the Great fullness jar from the shelf. Let us make a resolution to follow this simple activity where in we can write and record – all the good things that happened to us during the course of the year. It could be the beautiful memories you wish to save, goals you want to accomplish, a compliment from your boss or a fun evening with your loved one or a random act of kindness. At the end of the year, open the jar and relive those memories and you will realise that there is much to be grateful for.
January, 2021
Let us learn to be empathetic, let us be thankful for all those who made our lives beautiful and memorable with their footprints. Many people enter our life unexpectedly, some remain, some goes down the memory lane. Make a list of those whom you have lost contact, write a short e-mail or drop a text wishing them and see what wonders it can do for you. You will start appreciating the little things in life. Holistic development The true purpose of life lies in finding the purpose to live for. The pandemic introduced our real selves to us. It made us to realise that the real happiness lies in love and compassion and not in the materialistic things. It gave us the opportunity to replenish our old hobbies which most of us had left behind as we moved forward. Life is all about a process of constant change and evolution. It’s high time that we understand that we are more than just the flesh. Let us start working on building ourselves, broadening our perspectives. Scaling new heights A rocket/launch vehicle travels at a speed which we normally call as escape velocity in order to escape the earth’s gravity. What's stopping us to escape from our inner gravity, and reach out to new heights? Our body is never a limitation, we are the prisoner of our own thoughts. Retail Chronicles | Page 5
It’s time to step out of our comfort zone, explore more about ourselves. Read books, travel a lot, accomplish your goals how crazy it might seem to be – hiking the Himalayas or diving into the Mariana trench, live everyday well and aim to leave nothing unresolved. What 2021 can bring us? 2020 has been a year which will remain etched in our memories. Everyday has been an example of the fragility of life and a constant reminder of our mortality. It has showed us our strengths, weaknesses and how, over the time, we can adapt, recover and move on while still acknowledging the past. It has made us to re-assess our priorities, teaching us to be grateful for what we have and not take anything for granted, to realize that we have made it this far, to hold our loved ones closer, to let go off petty squabbles, to appreciate the little details in life. We love the aroma and the freshness the coffee brings us. Have we ever wondered what happens to the coffee plant once the harvesting is done? The branches of the coffee plant will be crushed and removed so that it regrows to provide a better yield in the coming year. With the vaccines rolling out and the economy indicating the signs of recovery, let us hope we regrow and emerge strong alike the coffee plant. We humans require a reset/refresh button to regain our lost innocence and kindness. It is in our hands to decide what kind of postpandemic world we want to build, for ourselves and our future generations. January, 2021
The AI Drive
RIYA SHAH MBA B Retail Chronicles | Page 6
January, 2021
Throughout the years, innovation has been the primary factor behind the survival of any industry. The rapid advancements in technology in healthcare, automation, education and countless other sectors have paved the way for a seemingly equal future. Of course, technology cannot be trusted completely, as seen by the significant number of glitches observed on a daily basis. However, at the same time, the opportunity cost of ignoring these innovations and sticking to the old ways, is much greater than the benefit we receive. The most recent and poignant trend in such innovations has been the advent of Artificial Intelligence, ordinarily known as ‘AI’. AI can be simply thought of as the apparent imitation of human intelligence by machines, which can be programmed to think and act as humans would. Although the term was first coined in 1955, one of the earliest allusions to such a concept can be seen Retail Chronicles | Page 7
as early as 1726, in Gulliver’s Travels by Jonathan Swift, where he talks about the Engine, “a Project for improving speculative Knowledge by practical and mechanical Operations.” Moving forward through time, more such instances are seen, culminating in the creation of the first radio-controlled vessel by Nikola tesla in 1898, equipped with a ‘borrowed mind”. Present scenario Suffice to say, AI has become much more pronounced in the 21st century, with one of its greatest applications being its use in the automobile industry. The use of algorithms and data to help a machine learn and solve given problems has been implemented in the manufacturing, actual transportation and service aspects of the industry. In the manufacturing process, humans can now work together with robots on designing, manufacturing of individual parts and subsequent assembling. January, 2021
A look at the future
In India, companies like Ola and Bangalore-based Intuition Systems and are now working on developing AI systems with the aim to provide more intelligent and cost-effective vehicles, which can deliver driver assistance, parking assistance, cloud computing, and even driver risk assessment. Such automatic vehicles capable of choosing the best routes and car speed themselves could lead to significantly lesser congestion on the roads.
Even though the actual adaptation of AI into everyday transport is taking place at a relatively slower pace, the future is much more brighter, more sustainable even. From traffic-navigating autonomous tech to self-driving grocery delivery cars, the penetration of AI into the industry is expected to boost the demand for the same in the upcoming decade. Level 1 and level 2 vehicles are expected to be replaced by Level 3, which will take up the majority of the market share, followed by levels 4 and 5. The levels simply refer to the number of automated parts or elements in a vehicle.
Another one of the more interesting applications is the driver risk assessment, where technologies are being developed that will be able to appraise the driver’s physical state i.e., if they are tired, stressed or unfit for driving, by taking in their eye movements, which could lead to decrease in the number of accidents caused. Companies have even started using AI for part replacement and repairs through the use of historical service data such as service orders and technical manuals.
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January, 2021
However, despite the obvious and pronounced benefits observed, it is imperative to keep in mind that shifting to autonomous vehicles would have its own unique set of problems. For a consumer, especially in India, with a prominent middle-income group, price sensitivity is high, which delays the inevitable transition to autonomous vehicles. There is also the possibility of there being a glitch in the code designed, which could lead to disastrous results if the same code is used for a multitude of machines. These machines could even be targeted by hackers once they have been in the market long enough, leading to yet another threat to personal data.
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AI, despite having all of the simulated human intelligence and some more, may still lack the intuition that allows humans to make decisions within seconds, in unexpected situations like accidents. For example, the choice that a human would make regarding who to save: themselves or the victim; such situations would provoke an ethical dilemma, as to how to code the machines. Nonetheless, new research does suggest that this too is something that can be controlled, as intuition is simply the process of pattern recognition. Thus, intuitively speaking it shouldn’t be long before AI intuitively responds.
January, 2021
AI IN FINANCIAL SERVICES Shikha Chauhan - MBA C
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January, 2021
Introduction The financial sector makes up one of the most important part of any country’s economy and rightfully so, after all it handles everything to do with money. Financial services are a broad range of more specific activities like banking, investing, insurance, etc. which are managed by financial firms and their professionals. Artificial intelligence, in simple terms, refers to the simulation of human intelligence in machines that are programmed to think like humans and mimic their actions. These machines are also designed to “learn� along the way just as humans do. These two incredibly powerful and important fields have collided and given birth to transformational services and products in the financial sector and this is just the beginning of the revolution. People used to be very Retail Chronicles | Page 11
cautious and conservative when it came to money and they still are to a great extent but the reliability and effectiveness of AI in action is changing it for everyone. AI reduces human biases and errors caused by psychological or emotional factors and improves the quality and conciseness of results. Auditing of financial statements, analyzing huge amounts of data, even finding out what the customers want from a particular service or what fits best for them and many more such tasks are now being tackled by the machines, although the transition is gradual which is the right thing to do as there needs to be a balance everywhere in everything that we do. We need to keep the right balance between humans and machines. Some of the very crucial services that AI is tackling in the financial sector these days areJanuary, 2021
Risk assessment: Learning from the past is the gist of how artificial intelligence works and this is exactly what risk assessment asks humans to do. For example, banks will check the credit score of a person in order to decide if he/she is eligible for lending. This is just one of the many things where past information needs to be assessed to be able to make well-informed, reliable(somewhat) decisions. Scanning through thousands of financial statement pages for all the borrowers and making predictions about whether they will be reliable in the future becomes very easy with the correctly programmed AI software.
Fraud detection and management: Financial firms have to be the most fraud sensitive places in the world. When a bank lends money to a borrower, it is essentially giving the borrower someone else’s money and so it becomes even more important to detect fraud even before they lend the money. AI based software does the job by intensively analyzing a borrower’s spending behavior to point out odd behavior, if any. An attempt to withdraw a sum of money that is unusual for that account holder might be pointed out by a human analyzing the records and then the computer can learn from it.
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Financial Advisory Services: As the pressure to alleviate the rate of commission on the financial service providers increase, they are going to turn to more robo-advisors instead of humans. The field of bionic advisory is also taking shape which says that machines along with human expertise from their experiences can work better than just a human being or just an AI software. Collaboration always reaps better results than individual efforts. This balance will be needed in order to make AI more efficient decision-making tool.
Trading: Trading involves large amounts of data and AI knows how to use it to its advantage. The machine can look at the patterns in the stock market, for instance, and predict how the market is going to behave in the foreseeable future (to some extent). AI can suggest portfolio solutions to meet individual investor’s demands. An investor’s portfolio depends on his/her appetite for risk or lack thereof, financial freedom etc., and AI can help them with the crucial decision of when to buy, sell, short etc. as well.
January, 2020
Managing finance: Personal financial management is one of the recent developments on the AI based wallet, Wallet which is a San Francisco based startup. It uses AI based algorithm to help the consumers make smarter decision about their money when they are spending it. It creates your spending graph by looking at your web footprint. Privacy breaching is an issue here but this is what the future lies in and data seems to be everything.
HDFC bank developed an AI-based chatbot, “Eva” (Electronic Virtual Assistant). Eva can assimilate knowledge from thousands of sources and provide simple answers in less than 0.4 seconds. ICICI bank has deployed software robotics focused on automating office work. Axis Bank launched an innovation lab called “Thought Factory” last year to accelerate the development of innovative AI tech solutions for the banking sector. The banks seem to be competing with each other to launch their AI solutions and stay ahead in the technology adoption curve.
AI in Indian Financial services: Although the AI application in the Indian financial service sector is in its nascent phase, all the companies are gradually adopting AI. AI is viewed as one of the most exciting and profitable ventures in the Fintech space in India. SBI, which is India’s largest public- sector bank with 420 million customers, is embarking on AI journey for both employees and customers. SBI is currently using an AIbased solution developed by Chapdex which scans cameras installed in the branch and captures the facial expressions of the customers and immediately report. The bank will now build a dashboard that will gauge the effectiveness of representatives or tellers based on customer feedback. SBI has also launched SIA, an AI-powered chat assistant that addresses customer enquiries instantly.
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AI is definitely the future of the finance industry and we can see many positive changes happening because of it. However, organizations need to exercise prudence and care in deploying AI applications for sensitive tasks. Data usage, privacy of the customers involved, reliability of the results themselves, all these things need to be kept in mind at all times while we make our way into the new array of AI everywhere. The users of AI analytics need to be very careful if the software has been provided by a third party or when proprietary analytics software is made on third-party platforms. These concerns also have legal and financial implications along with ethical ones. The reputational risk for the organization and the financial loss it has to incur in case of technical casualties is far more than is calculated. Calls for ethical and responsible use of AI have also grown louder than ever really pushing the leaders across the globe to create a framework of governance principles for this relatively novel field. The real challenge is to shift from principles to practice.
January, 2021
AI IN THE TRASNPORTATION AND LOGISTICS INDUSTRY
MBA-RM Prasoon Gupta Retail Chronicles | Page 14
January, 2021
AI a Brief Intro: From the start of the Industrial Revolution in 1760 humans have come a long way in innovation and technology, with AI being the latest addition to it. Artificial Intelligence or we are commonly known as AI has brought robots and machinery work in a similar manner as humans do but a lot faster. AI as all the other industries have also changed the way how the Transportation and Logistics industry function. Transportation and Logistics Industry The transportation and Logistics Industry is the industry that enables the fast and safe delivery of products. From procurement, warehousing, to transportation to delivery Logistics and Transportation industry deals with all. Currently, the Transportation and Logistics industry has reached a value of $11000 Billion and is expected to grow at a CAGR of 3.46%. The inclusion of AI in the industry has not only automated the processes but also able to forecast demand of a product as well as reduce human error Retail Chronicles | Page 15
with a reduced cost which has led to an increase in overall profit for the industry. According to the Accenture report, around 36% of the large, mid, and small size companies in Logistics have already adopted AI and 28% are in a positive view of implementing the AI. What AI Changes for the Industry? So, the big question arises what changes does AI bring in and how it has changed the Logistics and Transport Industry. The transportation and Logistics Industry has many processes involved and it has brought changes for different processes in a different manner. Predicting Demand: AI with the help of data can predict the demand required for a product reducing human error and loss. According to McKinsey Report AI, forecasting can help in reducing errors by 30% to 50%, the improved accuracy will lead up to a 65% reduction in lost sales due to inventory running out of stock and reducing warehousing cost from 10% to 40%. January, 2021
and Companies need to provide their employees jobs in other areas or to remove them. The AI is a new technology and is still in a developing, which makes it a costly affair for many companies making it not feasible for them for now, in addition to that AI is the technology that is data hungry meaning for its working and success loads of data is required, without the suffecient data you can’t achieve the desired results. Warehousing: AI can process data much faster than any human and analyze it more efficiently, there is a large scope for AI in Warehousing. From Automated robots to stack and store products in the warehouse to the use of automated vehicles instead of using human-driven forklifts, AI can decrease the human errors happening in the warehouse while also help in the proper utilization of space. Route Optimization: According to the report in 2016, Traffic Congestion amounted to an additional cost of $72.5 Billion to the Transportation Industry and loss of 1.2 Billion hours of lost productivity.AI in Route optimization helps in better route planning to avoid traffic, reducing the time in delivery and reducing the loss of money as well as work hours, plus it will also tell the expected time for delivery beneficial for both the consumer and supplier.
Conclusion: Despite being a costly technology AI has been proved to be quite beneficial for the Large Firms as those who have implemented AI have been able to increase their profit margins by 5%. AI is still new to the Transportation and Logistics Industry as only 26% of firms have implemented it but now AI is becoming a necessity for the Companies in Logistics and Transportation to remain competitive. It will be interesting to look how the Transportation and Logistics Sector will change with the improvement in the AI and how it will face the challenges of jobs reduction due to AI.
Challenges Ahead: Everything in this world that has a good effects also has some bad effects, like for Yin there is Yang. The AI also had bad effects and that is reduction in human requirement, basically AI is a human replacement and with the AI being implemented will lead to loss of human jobs
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January, 2021
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