Internet of things (IoT)
* Itis a system of interrelated computing devices, mechanical and digital
machines, objects, animals or people that are provided with unique
identifiers and the ability to transfer data over a network without requiring
human-to-human or human-to-computer interaction.
* The Internet of things (IoT) describes the digital connection of everyday
objects to the Internet in order to achieve total control over such objectsBig Data
* Big data are high volume, high velocity, and high variety information
assets that require new forms of processing to enable enhanced decision
making, insight discovery and process optimization” (Gartner 2012).Data mining (knowledge discovery in
databases)
* Extraction of interesting (non-trivial, implicit, previously unknown
and potentially useful) information or pattems from data in large
databases.Traditional and new sources of Data
“Traditional date sources ‘New data sources enabled by digitalisation
‘Medical data (@.g. medical history, medical condition. NT data Gg driving behaviour
Conattion of family members) Scimty andmeaicat conaraon
Demographic data (=. ape. gender. civil and farmly status,
protesnon sdcrers)
Exposure data (eg type of car value of contents inside the
28
Behavioural date xcept ot date a Sroking. drinkingIntroduction on Big DataBig Data versus Traditional Data
tet Ste rca Space ern
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Small Data <10GB Excel Fits in one Thousands of
machine's sales figures
memory
10GBto1TB — Indexed files, Fits in one Millions of web
Monolithic DB pages
>1TB Hadoop, Billions of web
i clicksBig Data AnalyticsBig Data Analytics Life Cycle
Dowe have right set of data?
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a
- —sTechnology Landscape
Technology landscape required
ts
TArtificial Intelligence (AT)
ie erin artificial intelligence was coined in 1956, but has become more popular today because of the
increased data volumes, advanced algorithms, and improvements in computing power and storage.
It makes it possible for machines to learn from experience, adjust to new inputs and perform human-
like tasks. Most AI examples range from chess-playing computers to self-driving cars. They rely heavily
on deep learning and natural language processing, Using these technologies, computers can be trained
to accomplish specific tasks by processing large amounts of data and recognizing patterns in the data.
Artificial Intelligence (AI) is a powerful tool that is widely deployed in financial services.
Specific applications, of Al include risk management, alpha generation and stewardship in asset
management, chatbots and virtual assistants, underwriting, relationship manager
augmentation, fraud detection, in insurance and algorithmic trading. (Discuss how each is
applied)Benefits of using AI financial services
Y It can enhance efficiency and productivity through automation.
Y Reduce human biases and errors caused by psychological or emotional
factors.
¥ Improve the quality and conciseness of management information by spotting
either anomalies or longer-term trends that cannot be easily picked up by
current reporting methods.Robotics
Robotics is an area of artificial intelligence in which machines take over
complex, dangerous routine, or boring tasks, such as welding car frames or
assembling computer systems and components.
Robotics use computer technology to do rules-based, repetitive tasks.Neural Networks
A neural network is a series of algorithms that endeavors to recognize underlying relationships in
a set of data through a process that mimics the way the human brain operates. In this sense,
neural networks refer to systems of neurons, either organic or artificial in nature.
They reflect the behavior of the human brain, allowing computer programs to recognize patterns
and solve common problems in the fields of Al, machine learning, and deep learning.
Neural networks are also known as artificial neural networks (ANNS) or simulated neural
networks (SNNs)..
‘They are a subset of machine learning and are at the heart of deep learning algorithms. Their
name and structure are inspired by the human brain, mimicking the way that biological neurons
signal to one another.Cont-
* Deep Learning and neural networks tend to be used interchangeably,
however the two are different.
* The “deep” in deep learning is just referring to the depth of layers in a
neural network. A neural network that consists of more than three layers—
which would be inclusive of the inputs and the output—can be considered a
deep learning algorithm. A neural network that only has two or three layers is
just a basic neural network.Artificial Neural Networks and Machine
LearningArtificial Neural Network
* Artificial Neural Networks can be trained with the network traffic data, then
used to recognize the patterns in network data. An artificial neural network
consists of a set of treatments to transform inputs to a set of searching outputs,
through a set of simple processing units or nodes and connections between them
(Sans Institute, 2011) (Alocious et al, 2014, p.3)..
* The neural network based intrusion detection uses two types of training
algorithms called supervised learning and unsupervised learning.
Neural Networks can be used to build profiles of software behavior and make
attempts to distinguish between normal and anomalous/ malicious software
behavior (Napanda et al, 20Cont-
* ‘The main objective in using Neural Networks is for the Intrusion Detection to be able to generalise from
insufficient data and be able to classify between malicious and safe networks. An artificial neural network
consists of processing units, or nodes, and connections between them.
+ The connection between any two units has some weight, which is used to determine how much one unit will
affect the other. Napanda et al (2015, p.2) argues that by assigning activation (value) to each input value, and
allowing the activations to propagate through the network, a neural network performs a mapping from one
set of values (assigned to the input nodes) to another set of values (retrieved from the output nodes).
Accordingly, a classical feed-forward multi-layer perceptron rule can be used to create an intrusion detection
system, Furthermore, backpropagation network is used successfully in network intrusion detection since
backpropagation is used for learning and this will help the Intrusion Detection System to build and learn
profiles of anomalous behaviors.Fuzzy Logic
°
* Fuzzy logic rules help computers evaluate the imperfect or imprecise conditions they
1 cr e-echucated- guesses base ep y rectniess rc
decision.
Fuzzy Logic is most effective when solving complex problems, where it consists of a fuzzy
set of elements where the membership of any element in the fuzzy set can vary from 0 to 1
(Napanda et al, 2015, p.3). It does not have a crisp value like in Boolean sets, like 0 & 1, but
the membership of the elements can be perfectly represented. While Fuzzy c-mean maps an
clement over 0 to 1, rough c-means classifies the object into lower approximation, boundary
and negative region (Napanda et al, 2015, p.3). Fuzzy Rough C-Means will partition the data
into 2 classes: lower approximation and boundary. We start by mapping the symbolic valued
attributes to numeric valued attributes (like tcp, udp, icmp, etc.). Features are then scaled.
linearly to each range, where the testing data is then grouped and fuzzy inference is applied
to generate data sets that define rules accurately (Napanda et al, 2015, p.Block-chain technology
* A Blockchain is a system of recording information in a way that makes it difficult or
impossible to change, hack, or cheat the rem. A blockchain is essentially a digital ledger of
transactions that is duplicated and distributed across the entire network of computer systems on
the blockchain.
A blockchain is a distributed database that is shared among the nodes of a computer network. As
a database, a blockchain stores information electronically in digital format. Blockchains are best
known for their crucial role in cryptocurrency systems, such as Bitcoin, for maintaining a secure
and decentralized record of transactions,
* ‘The goal of blockchain is to allow digital information to be recorded and distributed, but not
edited. In this way, a blockchain is the foundation for immutable ledgers, or records of
transactions that cannot be altered, deleted, or destroyed. This is why blockchains are also known
as a distributed ledger technology (DLT).