AI Use Cases

McKinsey Research
• DL techniques that address classification, estimation, and
clustering problems are currently the most widely applicable
in the use cases McKinsey have identified, reflecting the
problems whose solutions drive value across the range of
sectors.
• The greatest potential for AI McKinsey have found is to
create value in use cases in which more established
analytical techniques such as regression and classification
techniques can already be used, but where neural network
techniques could provide higher performance or generate
additional insights and applications. This is true for 69
percent of the AI use cases identified in their study. In only
16 percent of use cases did they find a “greenfield” AI
solution that was applicable where other analytics methods
would not be effective.
 McKinsey Research (Cont’d)
• The deep learning techniques on which McKinsey
focused — feed forward neural networks, recurrent
neural networks, and convolutional neural
networks—account for about 40 percent of the
annual value potentially created by all analytics
techniques.
• These three techniques together can potentially
enable the creation of between $3.5 trillion and
$5.8 trillion in value annually. Within industries,
that is the equivalent of 1 to 9 percent of 2016
revenue.
 Use Case
A targeted application of digital technologies to a
specific business challenge, with a measurable
outcome.
 Labeling
• Most current AI models are trained through
“supervised learning”, which requires humans to
label and categorize the underlying data.
• However, promising new techniques are emerging
to overcome these data bottlenecks, such as
reinforcement learning, generative adversarial
networks, transfer learning, and one-shot learning.
Range of potential AI value impact
by data type
Benefits from performance
improvements
• These increases in performance using deep
learning techniques enabled many of the consumer
products we already take for granted, including
services such as Siri, Alexa, and Cortana.
• Improved image-processing technology underpins
some of the capabilities that are being tested in
self-driving cars today.
For about one-third of use cases, the models
require frequent updating: three-quarters of
those cases require monthly refreshes, while
nearly one-quarter are at least weekly

Almost one in four cases requires a daily refresh; this is

especially true in marketing and sales and in supply-chain
management and manufacturing.
 AI Value
• Travel industry (by which we refer to all aspects of
commercial passenger travel, from travel agents and
airlines to hotels and online providers), in which the
potential AI impact can more than double what is
achievable using traditional analytic methods,
amounting to between 7 and almost 12 percent of total
revenue for the industry.
• As an example of one single AI use case of the many
that would be required for this industry to achieve its
full potential, Hawaii’s state tourism authority, working
with a major online travel company, uses facial
recognition software to monitor travelers’ expressions
through their computer webcams and deliver
personalized offers.
 AI is making its presence felt in FS
AI is making its presence felt in FS
Bank/FI Critical Process How AI is being applied

Routing inquiries Using voice recognition to verify inbound calls and

redirect customers to staff

Providing Account leveraging voice and image recognition to allow

access customers quicker access to their accounts

Detecting illegal trading Using ML/ NLP to monitor trader communication and
identify potential insider trading

Generating Customer Applying NLP to analyze complex customer records to

insights build specialize products

Developing Market Using ML/ NLP to analyze market news and earning
strategies reports to develop trading strategies

Improving Loan Process Using OCR/ ML to read and process loan application
UK Bank documents
efficiency

Detecting Fraudulent Leveraging NLP/ ML to check social media to

Major FI
Claims determine if customer claims are fraudulent
oicebots Top the Deployment List in Banks in Next 6 Months to One Y

pattern of deployments in banks specifically is a little dif erent. For instance, voicebots are on top of the list of deployme
 Introduction to Chatbots
Chatbots are programs that leverage AI techniques
such as
• Machine Learning (ML),
• Natural Language Processing (NLP),
• image and video processing, and
• audio analysis
to simulate conversations with human users
Chatbots continue to gain traction and are expected to achieve mainstream adoption in next two to
five years

Prescriptive Analytics Deep Neural Nets (Deep Learning)

Hype Cycle for Artificial Intelligence, 2018
Graph Analytics VPA-Enabled Wireless Speakers
Digital Ethics
Intelligent Applications Machine Learning Plateau will be reached:
Conversational User Interfaces NLP
Less than 2 years
Smart Robots Robotic Process Automation Software
Deep Neural Network ASICs Virtual Assistants
AI PaaS Cognitive Computing
2 to 5 years
Chatbots FPGA Accelerators
Natural-Language Generation
5 to 10 years
Speech Recognition
Human-in-the-Loop Computer Vision
Expectations

Predictive Analytics Ensemble Learning More than 10 years

Crowdsourcing
AI-Related C&SI Services Autonomous Vehicles
Neuromorphic Hardware GPU Accelerators
Knowledge Graphs Commercial UAVs (Drones)
AI Developer Toolkits
Virtual Reality
Artificial General Intelligence
Knowledge Management Tools
AI Governance
Augmented Reality

As of July 2018

Peak of
Innovation Trough of Slope of Plateau of
Inflated
trigger Expectations Disillusionment Enlightenment Productivity

Time
• Chatbots are one of the most transformational use cases of AI. While practice areas such as Virtual Assistants are heading towards
the ‘Trough of Disillusionment’, Chatbots are experiencing an increased hype
• With increasing focus on areas that involve communication between humans, especially customer service, Chatbots are expected to
gain further traction
8
Source: Gartner
India is one of the most attractive Chatbot destination in terms of start-up investment; It ranks third
after the US and the Europe

Chatbot Funding and Number of Rounds - Global Total Chatbot Funding by Geography

No. of rounds

905 182
319
139 72

225 90 52

38 19
128
28 18
77 71
62 105 107
6 4
14 60
13 39 South
13 22 4 4
East Asia
2011 2012 2013 2014 2015 2016 2017
Investment (USD million) No. of rounds Investment (USD million)

• Global investment in Chatbots witnessed a strong growth of 31.4% (CAGR) over 2011-17
• India continues to be an attractive market; positioned among top three countries in terms of total funding. Mumbai and Bangalore with
total funding of USD46.8 million and USD22.1 million, respectively, lead funding in India

17
Source: Tracxn
The market witnessed a relatively muted investment scenario over 2012-15, which grew more than
four-folds in 2017

Chatbots Funding and Number of Rounds - India Number of Companies Found - India

60
22 21

15 38
12 12 26
5
2
2 1 6 8
2 4 2 3
0.1
2011 2012 2013 2014 2015 2016 2017 2011 2012 2013 2014 2015 2016 2017
Investment (USD million) No. of rounds Number of Companies

• Chatbots landscape in India is characterized by the presence of 150+ companies; 27 of these funded in last five years
• With an average ticket size of USD 3.5 million, Series A funding continues to lead seed funding which stood at USD0.9 million in 2017

18
Source: Tracxn
Gupshup, one of the leading bot and messaging platform start-ups, is the highest funded Chatbot
start-up in India

47.0
Funding (USD million)

13.3 11.7
6.7
3.2 1.7 1.6 1.3 1.1 1.0

Gupshup Uniphore Active Mihup Niki.ai Touchkin GloMantra Wysa Frontdesk.ai Haptik
Intelligence

Stage Series E Series B Series A Series A Series A Seed Series A Seed Seed Series B

Funding
Round 5 6 3 2 5 3 2 1 1 2

20
Source: Tracxn
Chatbots find highest implementation in customer service function; They are gaining traction in sales
and marketing function due to two-way communication nature Illustrative

Sales & Marketing IT

• Generate leads • Incident notifications

• Schedule meetings • Incident creation
• Push product sales • Task notifications and
Customer Service HR notes Finance Support
• Proactive customer
interaction • Outage alerts and
• Quick response time • Candidate screening • Payroll processing
reports
• Increased customer
• Available 24X7 • On-boarding • Handle seasonal spike
engagement • Reset passwords
in requests
• Handle high volume of • Company information
requests and policies • Perform audit
• Improved agent • Employee training
productivity
• Performance
• Lesser errors management

9
 Yellow Conversational AI channel powering enterprises to market, acquire,
service and support customers through voice and messaging
Messenger
BFSI, FMCG, Retail & e-commerce, HR, Finance, IT,
35+ clients Travel & Hospitality, Energy, Customer Sales &
10 million users Automotive, Pharmaceuticals & Support, Enterprise
700,000 queries per day healthcare, Oil & Gas, and Salesforce
Manufacturing (other) and Trade Partners

Key Tools /
Sectors Business
Highlights Platform /
Functions
Solutions

USP /
Key Benefits Use Cases Innovation /
Value Addition

Enterprises
Customer Acquisition End Users
and Engagement
Available 24x7 Customer Support Single Unified platform for voice and chat
Customer Retention based conversations
Omni-channel Digital Marketing
Employee Productivity Supports 55+ global languages
Personalization E-mail Automation
Better ROI on marketing and advertising Integrated conversational analytics and
Self-service IVR Automation
20-30% reduction in support costs conversational notifications
30% growth in
20% increase in employee productivity
number of
15% increase in the NPS score conversations 46
 AI at ICICI Bank
ICICI Bank, India’s largest private-sector bank, is an early adopter of AI, with a new
division—Technology and Digital Group (TDG)—established to improve its digital
capabilities.
The bank has deployed software robots in over 200 business process functions
across the organization, including retail banking operations, agri-business, trade
and foreign exchange, treasury, and human resources management. The bank has
implemented the platform mostly in-house, leveraging AI techniques such as facial
and voice recognition, natural language processing, machine learning, and bots,
among others.
The bank’s robot capabilities include:
• Chat bots that act as quasi-bankers
• Software bots that carry out remittances while helping customers with their
loan choices
• Email bots that sort customer and distributor emails based on transaction status
or similar criteria; this has helped the bank slash its response time.
The software robots now perform over a million banking transactions every
working day. This has reduced the response time to customers by up to 60%, and
increased accuracy to 100%, sharply improving the bank’s productivity and
efficiency. It has also enabled the bank’s employees to focus more on value added
and customer-related functions.
• HDFC Bank’s Electronic Virtual Assistant, or EVA has
become India’s largest banking chatbot. Deployed in
March 2017, EVA successfully addressed over 2.7
million customer queries within six months of its
deployment. Over 5.3 Lakh unique users who held 1.2
million conversations. EVA is available on all digital
platforms of the bank, including the website, mobile
site and a dedicated customer portal. Besides queries,
Eva has also generated a lot of business leads for the
bank.
• Policybazaar’s Chatbot, PBee is an AI-powered
chatbot to sell insurance online. As a result of the
chatbot, the company’s chat volumes increased 5x, and
time to respond reduced by 25%. It handles over 60%
of all messages. The chatbot is powered using Google’s
DialogFlow. The company is planning to extend the
chatbot to its health insurance and investment
customers as well.
 AI in Back-End BPM
• ICICI Lombard Leverages Robotic Process Automation to automate
mundane tasks that were hampering productivity, causing human errors
as their business grew and transaction volumes increased. The results
have been astonishing, with 100 transactions being cleared in 5 minutes
as against 4 hours earlier; Insurance policy digitization time reduced for
fire and group health insurance policy from 4 hours to 1 hour per policy;
Time to respond to user management requests has come down from 15
days to just 2 days. Similarly, time to send out quotes reduced from 5-6
hours to less than 3 minutes, customer satisfaction index improved from
97% to 99%, with an increase in cross-sale by 2% and a similar
percentage of new agents and brokers getting onboarded.

• HDFC Life Insurance’s AI-based insurance Email Bot India’s leading

private sector life insurance company, HDFC Life, launched an insurance
Email Bot in 2017, named SPOK. The Email Bot can understand,
categorize, prioritize and respond to customer emails within
milliseconds. Besides answering queries quickly, SPOK also helps
generate deeper insights into customer needs by identifying patterns in
their interactions. The email bot uses Artificial Intelligence and Natural
Language Processing and mimics human cognitive abilities in reading,
comprehending, interpreting, and conversing.
 AI in Customer Service
• IndiaFirst Life Insurance’s virtual assistant provides
real-time customer resolution and support on
insurance transactions. Called IRIS (IndiaFirst
Responds), the bot answers queries related to the
company’s products, fetches premium statements
and notices, answers fund value inquiries, and
provides updates on application status and
surrender value inquiry.
 Perceptions and Plans for AI

AI for Fraud Detection and Prevention Top Deployment Priority

HDFC Life Insurance’s AI-based
insurance Email Bot
• India’s leading private sector life insurance
company, HDFC Life, launched an insurance Email
Bot in 2017, named SPOK. The Email Bot can
understand, categorize, prioritize and respond to
customer emails within milliseconds. Besides
answering queries quickly, SPOK also helps
generate deeper insights into customer needs by
identifying patterns in their interactions. The email
bot uses Artificial Intelligence and Natural Language
Processing and mimics human cognitive abili- ties
in reading, comprehending, interpreting, and
conversing.
 Robotic Process Automation
• ICICI Lombard Leverages RPA to automate mundane tasks
that were hampering productivity, causing human errors as
their business grew and transaction volumes increased.
• The results have been astonishing, with 100 transactions
being cleared in 5 minutes as against 4 hours earlier;
Insurance policy digitization time reduced for fire and group
health insurance policy from 4 hours to 1 hour per policy;
Time to respond to user management requests has come
down from 15 days to just 2 days.
• Similarly, time to send out quotes reduced from 5-6 hours to
less than 3 minutes, customer satisfaction index improved
from 97% to 99%, with an increase in cross-sale by 2% and a
similar percentage of new agents and brokers getting
onboarded.
 AI in Customer Service
• IndiaFirst Life Insurance’s virtual assistant provides
real-time customer resolution and support on
insurance transactions.
• Called IRIS (IndiaFirst Responds), the bot
• answers queries related to the company’s products,
fetches premium statements and notices,
• answers fund value inquiries, and
• provides updates on application status and surrender
value inquiry.
How Technology can simplify
Mortgage Approvals
 AI in the Factory
• In February and March 2018, BCG conducted an online
survey of companies in order to assess their progress in
adopting AI in industrial operations.
• Companies in the US, China, and India have taken an
impressive lead in adoption over their counterparts in
such countries as Japan, France, and Germany,
according to Boston Consulting Group.
• Transportation and logistics, automotive, and
technology companies are at the forefront of AI
adoption, while process industries (such as chemicals)
lag behind.
 Supply Chain Management
• Demand forecasting is a key topic for applying AI
within supply chain management. By better
anticipating changes in demand, companies can
efficiently adjust production programs and improve
factory utilization. AI supports forecasting of
customer demand by analyzing and learning from
data related to product launches, media
information, and weather conditions.
• Some companies use machine-learning algorithms
to identify demand patterns by consolidating data
from warehousing and enterprise resource
planning (ERP) systems with customer insights.
 Production
• Some steel producers are using AI to enable furnaces to
autonomously optimize their settings. AI analyzes the
material composition of iron intake and identifies the
lowest temperature for stable process conditions,
thereby reducing overall energy consumption.
• Robots enhanced with intelligent image-recognition
capabilities will be able to pick up unsorted parts in
undefined locations, such as from a bin or a conveyor
belt. First applications are already available in, for
example, the automotive industry.
• Individual companies will find different use cases
valuable, but producers can achieve full benefits only
by applying AI and integrating data pools across
functions.
 Maintenance
• AI supports predictive maintenance—for example,
avoiding breakdowns by replacing worn parts on
the basis of their actual condition.
• This technology will especially benefit process
industries, where breakdowns lead to lost sales. For
example, some oil refineries have implemented
machine-learning models that estimate the
remaining time before equipment failures. The
models consider more than 1,000 variables related
to material input, material output, process
parameters, and weather conditions.
 Quality
• Automotive suppliers have started to use vision
systems with machine-learning algorithms to
identify parts that have quality problems, including
defects not contained in the data set used to train
the algorithm.
• AI can also continuously analyze and learn from
data generated by machines and the production
environment. For example, AI can compare drilling-
machine settings with material properties and
behavior to predict the risk that drilling will exceed
tolerance levels.
AI will be ubiquitous in the
Factory of the Future
 AI @ Flipkart
• Flipkart said that its data scientists had developed an
innovation that uses artificial intelligence (AI) to make
sense of complex Indian addresses as well as detect
and prevent address frauds. It said the innovation
correctly classifies and identifies Indian addresses and
resolves inconsistencies with a 98% accuracy rate.
• “There are people whom we call as resellers, they
exploit the online discounts that we provide and sell
(products) offline for profit,” said T. Ravindra Babu,
principal data scientist at Flipkart. “They are like any
other people and very difficult to identify. We have
built machine learning models to identify them”.
Key AI/ML use cases @ Flipkart
 Indian Addresses
• Flipkart has a registered customer base of more than 100
million, and Indian postal addresses, which are intrinsically
complicated, also pose a huge challenge for last-mile
logistics. The incorrect addresses not only lead to delayed or
failed delivery of shipments, but also severely affect the
revenue of e-commerce companies as well as customer
satisfaction. Dr. Babu said the AI-based solution developed
by the firm not only rightly identifies such addresses, but is
also able to save at least three hours of time per delivery
hub.
• The company, which deals with millions of addresses had
found a huge number of spelling variations after analysing
them. “For example, ‘apartments’ [can be] spelt in 700
different ways out of 30,000 addresses”. Typically an
address would contain anywhere between eight to 12 words
to identify it. “But there are addresses which [have as many
as] 200 words.”
 Flipkart & Machine Learning
• Search itself is a huge research area for machine learning, says
Babu. “The normal example that we take in a presentation is the
‘iron table’. Is the user asking for a table made of iron legs or a
table for ironing the clothes?” Flipkart’s first search result links to
the ironing boards category and provides a link to foldable iron
tables on the third result.
• Flipkart is working on a pilot project in metro cities to optimise
the routes of their delivery agents and creating systems to
automatically sort packages on their final routes by area. “A few
hours of activity has been reduced to a few minutes,” Babu says,
quantifying its impact.
• Pin code prediction is another feature that is in production – it
helps their systems understand if a particular address has an
incorrect PIN code, which users often get wrong, and can result in
delayed deliveries and increased costs.
• In Flipkart, each one of us might see a different screen, depending
on what its machine learning algorithms figure are our priorities.
 Flipkart & Deep Learning
• Flipkart uses computer vision to understand and
extract product attributes from images uploaded by
its sellers, and to check if it is accurate. “We literally
get millions of new products every day, if I were to
put human resources into that, it would be too
expensive and untenable,” Datar says.
• Its deep learning models check to ensure that
there’s no vulgar or objectionable content being
uploaded. “Like an Indian flag being shown on a
doormat, an example that happened with Amazon,
or showing the usage of drugs, or something in the
images,” he says.
 Flipkart & ML
• A recent application of machine learning that went into
production in December 2017 calculated RPI, short for
revenue per impression, for any new product on Flipkart. It’s
a measure that helps Flipkart figure out how much revenue
it would make if it showed a particular product to you.
• One of every three products sold in the lifestyle category
comes from recommendations.
• Speech recognition and support for Indian languages is
being seen as another critical area for Flipkart –the idea is to
build an interface that accommodates for the next wave of
internet users who are illiterate or semi-literate. Flipkart
currently supports voice input for search through its web
app and only supports English and a smattering of Hindi.
 A/B Testing
• “Any new model that we have, we take it through
our A/B platform. For a subset of the users, we will
still show the old system that is currently running,
for another subset, say 20%, we show this new
system.
• We look at metrics... the average search position,
the click through rate, the conversion rate, and so
on, and make sure that these KPIs (key
performance indicators) are improving in the right
direction.” he says.
 Flipkart: AI-first
• “E-commerce is a very thin margin business. At the scale at
which we are operating, any reliance on manual operations
or labour intensive processes really hurts our bottom line,”
says Datar. “Predicting future demand is also a huge
potential money saver. It can save us a lot of money by
giving that guidance to our sellers.”
• “Aspirationally, we want to democratise some of the
technologies that we are building in the context of India, so
that they can then be used by other businesses in India and
in the public sector as well,” he says.
• Flipkart daily generates over 10 terabytes of data, which
grows five-fold on a day during events like its annual Big
Billion Days sale.
 AI/ML at Myntra
• The Rapid team at Myntra, which oversees fashion
brands like Moda Rapido and Here & Now, has
more data scientists than it does designers. And
machines tell them just what designs are sure to
sell. With lines that are dropped at lightning speed
and brands that scale just as fast, the numbers are
proof that they are onto something.
• Here’s how a team, whose work lies at the
intersection of data, tech and design, built a service
that’s going global and revolutionizing the fashion
industry.
 Fashion @ Myntra
• The hypothesis was: Since Myntra already had large
amounts of data, could they somehow leverage this to
better understand what consumers want and build products
to cater to that demand?
• The team chose T-shirts and kurtas to begin this seemingly
herculean task with what resources it had available. Here’s
what the early days looked like: First, someone would enter
a query for the top- selling kurtas and T-shirts on Myntra
and get the corresponding style ids.
• Then, the pictures of these styles were printed, scissor-cut
and manually pasted onto big whiteboards. The pictures
were arranged according to clusters — 30 red t-shirts, 50
blue, 40 biker t-shirts and so on. The team would then
ascertain, based on data, which of these themes were likely
to work and, accordingly, the first batch was designed as per
its findings.
 New Brands
• The idea behind the Rapid platform was not just to analyze
sales patterns. It’s good enough when a fashion brand
knows just what color or styles will sell for sure. For Rapid,
however, these turned out to be low-hanging attributes.
“The complexity we are at today is what kind of stripes will
sell, in which color will it sell and on which style.”
• In the two years since Moda Rapido — Spanish for ‘fast
fashion’ — was launched, it has grown over 300% year-on-
year to reach 1.5% of the platform. Here & Now, a swift-
moving brand with a name that captures the instant
gratification mantra of Gen-Y, is a whole other example of
how a brand backed by data can scale. “In December 2017,
just three months after it launched, Here & Now was the
second-largest apparel brand on Myntra,” says Anurag. Here
& Now accounts for over 2.7% of the platform sales, thanks
to its ideal mix of the right price, strategy and trends.
 Moda Rapido
• The computer is fed with data from the entire digital
space, including fashion portals, social media and
Myntra’s own customer data, which the computer
scans to zero in on what customers are looking for.
• Using computer vision and AI/ML on the scanned data,
the platform creates thousands of permutations and
combinations and zooms in on what would sell best;
creating a TechPack which has all the design
dimensions and specifications for manufacturing.
• Moda Rapido has grown to become a ₹50 crore brand
in 18 months, has the fastest sell-throughs and is raking
in the highest gross margins compared to any other
brand on Myntra.
 Lean
• “It takes seven to 45 days for a collection to drop.
One of our t-shirt platforms’ turnaround time is 24
hours, and designs drop in even a few hours
sometimes,” explains Rajesh.
• The platform also tackles the issue of just how
much to produce.
• What this translates to is next to zero wastage,
minimal non-live stock, no extra inventory, and a
high success rate.
• “One out of two of our T-shirt designs are
bestsellers.”
 AI/ML at Myntra
• Two years since it all began, Vorta is well on its way
to becoming a global Software as a Service (SaaS)
product. “We’ve already signed up one of the
world’s leading apparel brands and few of India’s
top western and ethnic wear brands on the Vorta
platform”.