In 1950, Alan Turing proposed a question in his paper “can
For this purpose, we will define artificial intelligence as the ability of a system to perform tasks that normally require human intelligence. This includes, but are not limited to, data analysis, learning, planning, and the ability to generalize. For many, AI technology seems to be a tool exclusive to corporations, scientists, and tech corporations. In reality, artificial intelligence is present everywhere. From smartphones, watches, television sets and vehicles, artificial intelligence enables a number of features that simplify tasks, allow automation, and provide intelligent solutions.
According to John Launchbury, former Innovation Information’s director of the United States’ Defense Advanced Research Projects Agency (DARPA), the development of AI comes in three waves:
First Wave AI (Handcrafted Knowledge)
The first wave of AI is a form of technology that simplifies complex facts and rules and maps out the best possible outcome or steps that can be taken. This type of AI technology relies on human expertise to provide the system with the facts and rules of the process that it aims to improve. The system then works through all the possible outputs and make the best recommendations. Examples of which are systems that automate schedules of logistics companies, automated tax software, and virtual board game systems (e.g., Chess, Checkers, Go).
First wave AI handles narrowly defined problems efficiently. However, this type of technology has no learning capability; therefore, It cannot adapt to uncertainties or changes in the facts or rules, without human input. However, they are still relevant in improving processes, product testing, and identifying threats and opportunities.
Second Wave AI (Statistical Learning)The second wave of AI is the AI technology that makes visual recognition, speech recognition, and other perceptive technologies possible. This wave in AI development works through complex algorithms to sort through big data and identify data from one another. Second wave data is powerful in going through vast amounts of data in a matter of seconds and classify them according to the output intended.
If you are interested in knowing the current use of AI in the finance and accounting (F&A) industry, we encourage you to read our Robotic Accounting Primer. This primer explains the benefits of having an AI in your F&A processes and how you can prepare your organization in incorporating artificial intelligence. You can download our Primer by clicking the button below.