Risk and calamity management through AI

When we think of risk management data analytics, the first thing that comes to our mind is financial business analytics. The risk involved in financial transactions is well known. Analyzing data eases the uncertainty in stock market investments. It is also widely used in banking systems to predict loan defaulters and predict fraud.

Read our article on: How AI can help revive industrial operations from COVID losses?

Why should you invest in Risk Management through AI?

1.       Saves bigger future losses

Art or risk management goes beyond financial data science. The world of business is more than relying on investments in insurances to tackle risk. Today, it is important for every business to foresee potential risks and work on solutions to remove or normalize the effect before the crisis hits. Investing in data reporting dashboards that use predictive analysis helps your business save much future damage. Reporting dashboards make repetitive work like monitoring and weekly reporting automated. This not only saves precious man-hours but reduces the risk involved in humans handling repetitive tasks. A global bank used technology to detect unacceptable false-positive rates in anti-money laundering (AML) detection—which were as high as 96 percent. Using machine learning and artificial intelligence they were able to identify crucial data flaws. The data-quality improvements made saved an estimated 35,000 investigative hours. Another example is the use of advanced analytics by Des Moines Public Schools that identifies and helps at-risk students. Using predictive analytics they are able to give students the attention they need so that they don’t have to drop out of school. They help analyze risks in real-time and provide insights to improve your business.

2.       Market analysis and customer response monitoring

Analyzing the response of customers to existing products can help you predict responses for future launches. Breaking down customer data and customer behavior trends by looking at your customers’ transactions to better understand and predict the attitude and behavior of your customers is called Market analysis. Let’s consider the reason for the failure of the famous case of Pepsi Blue. The lack of market research before launching the product in India failed to point out how people felt the color resembles that of Kerosene. Pepsi’s decision to sell the product under the name “Pepsi” confused the customers who were not expecting a berry flavor to their preferred soft drink. The failure of the product clearly points to the importance of analyzing your market. Artificial intelligence can help you understand your customers and their needs. Continuous monitoring of customers’ behavior trends and by adapting to their ever-changing moods, AI can point you to the preferred audience for your products. It can give you insights like the right time to release a product, spending habits of your customers, and their response to the social, economical and political issues of the world by analyzing their social media presence. This will help you make better decisions and reduce the risk of making these decisions.

3.       Helps you manage a disaster

Real-time Artificial intelligence monitoring helps you predict the possibility of a disaster. But in these uncertain times, we all know that disaster can come from any direction in any form. How then can you help your business restore its health?

Today’s complex algorithms help you come up with solutions by looking at the bigger picture. They break down your data into tiny units and analyze the possible ways to revive. Let’s consider how many chess combinations can you come within a second? IBM’s Blue Gene/L can routinely handle 280 trillion operations every second. A single scientist with a calculator would have to work nonstop for 177,000 years to perform the operations that Blue Gene could do in one second. Today’s complex algorithms can help you analyze all your options before deciding the one right for your business.

How can AI help in calamity management?

HCL recently partnered with the Tamil Nadu government to set up a Disaster Management-Data Analytics Centre. Data analytics using complex AI algorithms can help governments capture data trends in real-time and help the government modify decisions on the go by analyzing the response of the people to these decisions. Use of AI-powered drones to monitor and report vast areas in disaster-affected areas was used by the government of Uttarakhand and Kerala. Analyzing this huge amount of data allows response teams to mark affected regions and conduct risk and damage assessment promptly from remote locations. By predicting the displacement of people using AI rescue teams can meet citizens midway and even direct them to nearby shelter locations. With the world slowly trying to revive the economy, it is important for the governments around the world to keep a close watch on the data generated and use meaningful insights to improve the failing economy. Governments can analyze emergency calls and improve turnaround time in solving these emergencies. They can also monitor the availability of essential services and suggest ways to improve the supply chain management of these sectors.

  1. Identify vulnerabilities and hotspots

The use of processes like the analytic hierarchy process (AHP), helps to identify the factors that can cause failure and analyze the effect of these factors by determining the probability of these factors. A study conducted on mapping disaster vulnerability in India using Analytical Hierarchy process helps mark the level of disaster vulnerability across the country and identify hotspots

Even in our business, we need to identify the areas where there is a high possibility of failure. AI can help in identifying these hotspots and make us aware of our business

  1. Examine interdependencies

Interdependencies turn disasters into a full-blown domino effect. Being aware of interdependencies can help make better decisions. In times of calamity, you need to take into account the shortage of essential services and the grocery supplies as well. AI algorithms recognize these interdependencies and see help connect the dots to form a big picture. Real-time monitoring helps keep a check on all possible pain points and reduces the effect of a disaster by giving quick insights to stop the chain reaction of a disaster. Even in business, it is important to understand the dependencies of each node and ensure a plan in case the tiles start falling.

  1. Connect the links

In case of a disaster, it becomes important to achieve clear communication. You have recognized the problem, found a solution, but does everyone know what to do? Human communication depends on perception
and can cloud the message. AI can help come up with a clear roadmap and distribute responsibilities. Having a common dashboard for communication reduces assumptions and helps keep everyone clear about the plan of action. Reporting through drones and sensors, broadcasting plans of action, and forecasting where people will go through predictive analysis help the process of disaster management to be more controlled.

  1. Understanding the cause and effect relationship

We have already established that AI can try multiple combinations at a time to come up with an optimal solution. But it is important to monitor the effectiveness of the decision taken by monitoring the response. Social media monitoring can be a powerful tool to understand the effect of a disaster. It can be used for communicating with the public and for sentiment analysis to understand how people are reacting to a situation.

geniSIGHTS has developed an AI-driven platform for unstructured data. Its complex algorithms analyze social media trends and predict sentiments on business & business parameters – Net Sentiment Score, Sentiment trends, etc. Rightly named as “Ordo Ab Chao” which means Order from Chaos. It structures and filters social media to derive meaningful insights into how a disaster is accepted by the general public. The damage done to the image of companies in the face of a disaster can be viewed and monitored. Efforts to revive the trust can be analyzed to plan better disaster management.

Check out Ordo Ab Chao to see how people are reacting to the COVID-19 pandemic at: https://flash.genisights.com/ordoabchao/

Also check out our Tamil Nadu COVID19 Information Tracker bot for quick updates on Tamil Nadu cases: https://genisights.com/CovidBot/

The disaster was once considered unpredictable and uncertain. Today Artificial Intelligence Risk Management is helping the world change this definition. Predictive analytics risk management helps us be prepared and anticipate calamity before it strikes. Prevention is better than cure. Continuous monitoring, highlighting hotspots, and noting the interdependencies can help achieve this. Even with all the preparation when disaster strikes there is much to do to respond to the hit. AI helps come up with effective ways to soften the impact. The next step is to revive from the attack with optimism. Complex algorithms to restore the economy and the people after the calamity strikes are an important part of risk management. The importance of seeing the whole picture and multi-tasking responsibilities can be easily handled by AI. It is important to handle tough times without letting emotions take over. Relying on machines ensures that decisions are unbiased and bold enough to be outcome-oriented.

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