News: General News

Artificial Intelligence and B2B Credit

Friday, July 28, 2017  
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One of today’s fastest-growing technological advancements is artificial intelligence (AI). More products and services include AI systems, which have the ability to learn and improve based on the results of each interaction they carry out. 


If you’ve ever scanned personalized product recommendations from Amazon, you’ve seen AI in action. Each time someone purchases a product using Amazon, all of the information about that transaction is added to a database. Amazon’s software uses all of that information to produce its recommendations. The analysis can go beyond simply considering which products people purchased at the same time. It can factor in location of the purchasers, purchase dates, purchaser gender and all other available data. With each purchase made on Amazon, not only does the data change, but so too does the analysis used to produce the results. 


As AI expands into different facets of life, it will affect the way we work. Credit departments will change as a result of AI. Exactly how AI is implemented and how soon will vary, but it’s possible to get some insight into how it will be used by examining recent research, and other industries and job functions.


According to the recent white paper commissioned by Salesforce, 2018 will be a landmark year for AI adoption. More than 40 percent of companies said they will adopt AI within the next two years. In fact, by 2018, IDC forecasts that 75 percent of enterprise and independent software vendor development will include AI or machine-learning functionality in at least one application. The types of AI that companies are planning to use, or exploring, range from machine learning (25 percent) and voice/speech recognition (30 percent), to text analysis (27 percent) and advanced numerical analysis (31 percent).


Experian recently examined how the consumer debt collection industry could be radically changed by AI. 


“AI has the potential to revolutionize debt collection by reaching out to debtors via the media they use, speaking to them in a language they understand, and developing customized solutions based on each person's individual circumstances,” author Gary Stockton wrote. 


At least some of AI’s use in consumer collections could be applied to commercial collections as well. 


Vendors that service B2B credit functions have also begun rolling out AI-related solutions, which shed some light on the future of AI implementation. Earlier this year, trade credit insurer Euler Hermes and fintech company Flowcast announced a partnership aimed at adding AI functionality Euler’s supply chain management credit solution. 


In June, software provider HighRadius announced its AI solution, Rivana, which “combines the power of machine learning with rich A/R data, to help credit and A/R departments significantly reduce the number of transactions they have to manually review, freeing up their time for high-value, decision making.”


AI is here and its effect on the credit department will likely be significant. As part of a recent NACM webinar, presenter Robert Karau, CICP, manager of client financial services at national law firm Robins Kaplan LLP, offered some useful advice for credit managers: 

  • Be aware of new technologies.
  • Understand the basics of these technologies.
  • Consider the pros and cons of how they could fit into your business model.
  • Spend time each year thinking and discussing how you do things now, and then reimagine ways to include this technology.
  • Know how to communicate with the IT professionals in your company.

“Credit professionals are leaders, decision makers, problem solvers and, at times, even miracle workers,” Karau said. “We need to be the drivers, innovators and experts in our fields of endeavor. We need to be victors and not victims of new technology.”