We have attended several discussions on technology recently and in particular discussions on AI and the impact of ChatGPT.
If you do one thing this month, it should be to ensure that you or someone in your organisation, whether you are a business or not-for-profit, understand what’s happening in the world of AI.
So, what exactly is ChatGPT? ChatGPT is the fastest growing technology application of all time, reaching 100m users in weeks, compared to the next fastest, TikTok, which took 9 months.
Large Language Model AI, which is what ChatGPT is, is a revolutionary technology that will have an impact on all organisations. In addition, generative AI is becoming more accessible to smaller organisations. Many technologies are heralded as transformative, however, in this instance, it is likely to be the case.
Like all transformative technologies, there will be winners and losers. There will be early adopters who achieve great rewards, there will be early adopters who fail, and there will be missteps and successes. We don’t know what the longer-term impact will be, but we know there will be an impact.
This is not a technology for tomorrow. Travelling to London regularly I have seen how organisations are already using this technology and rethinking their entire strategy.
AI will likely follow a similar path as the growth of the internet. There was an initial boom-bust as everyone rushed in, but over time the technology has changed the way many businesses and customers interact and the way we collaborate. The smartphone then accelerated the way we use the basic technology of the internet. AI may follow a similar path of embedding itself in many things we do.
How Could AI Impact Your Organisation?
AI is already widely in use but until now has been prohibitively expensive for smaller organisations to harness. Google, Amazon, Meta, Netflix, supermarkets, banks and other large tech companies have been using AI for years to better understand their customers and do things like target their marketing and ads to the individual.
That restricted access based on cost is changing as Microsoft and Google and a number of tech start-ups are in an arms race to make AI accessible to the masses. Microsoft alone spent £20bn last quarter investing in AI and the release of ChatGPT is just the first salvo in the battle between the tech behemoths.
There are 5 areas where AI is starting to have an impact on the way we work and the way we make decisions:
- Marketing and Customer Service. Targeted marketing to your customers based on what they have previously bought is where AI first had its greatest impact. Pushing personalised marketing is a proven way to drive sales. AI will make this much easier to do. Automating customer service is another thing we are already seeing, rather than selecting an option when we call a company you will have started seeing organisations ask you to state your query or issue, AI then directs you to the right information or person. Automated chat functions are another area where AI is already visible. This sort of technology will become more available and commonplace for smaller organisations.
- Creativity, Design and Content Creation. AI systems can analyse more information than any individual human can ever know or access. Sketching out plans for a new product, creating marketing brochures, writing your HR policies, editing videos, producing presentations…anything that requires creative collaboration and review can be exponentially sped up using AI. Using AI to brainstorm and provide a starting point for any creative process is the revolution that is happening now, driven by ChatGPT and similar applications. AI will enable everyone to spend less time on the initial drafting of any creative process and more time on refining and finalising.
- Process Improvement and Automation. Any process that requires repetitive tasks or repetitive analysis can be “learnt” by an AI application. Any human activity that requires decision-making based on set rules can be more readily automated and more efficiently done by computer and AI takes the ability for computers to do this without human technical or specialist knowledge to the next level. Simple examples where this is already used in larger companies would be things like stock ordering, data entry and quality control. Current systems can take a form filled in by a human and read and enter that data into a system. AI goes further in that it can take a freeform email, read, and analyse what that email is about, who it’s from etc. and turn that email into a data set and process it and respond.
- Data Analysis. Data analysis is really at the heart of AI. AI can quickly analyse data and based on virtually all the knowledge known to human history interpret and present that data and recommend what actions or decisions need to be made. Data is a hugely valuable resource. If you look at where the main wealth creation has come from in the past 10 years it is through the ability to collect, analyse and use data. The big tech firms are only the most obvious example of this. AI makes data and technical knowledge an even more valuable asset for every organisation. To be ready for AI, every organisation should review and consider what data it has, why it is important, how to improve it, collect it, how to make sure it is accurate and how they can best use it. AI can then make the process of decision-making based on that data far more impactful.
- Software and Application Development. Technology developers and coders are already using AI to turn requirements into computer code to build software applications. AI has the ability to enable everyone and every organisation to build its own software tools and applications without detailed technical knowledge or skills. This in combination with low code applications such as Microsoft PowerApps will allow organisations to customise and write bespoke software applications and automated process specific to their needs. There will be a move away from big-ticket single provider third-party software solutions that are time-consuming and difficult to implement, are hard to change, and never do what you really need them to do, and a move towards modular technology systems and infrastructure where you have a base spine system and allow individuals and teams and departments to build their own process and data solutions.
In addition to the above, you should be aware of and keep an eye on new apps and developments from firms like Google and Microsoft. Microsoft has announced that they are not far away from embedding AI in their 365 office applications with the launch of CoPilot. When launched, AI will be embedded in applications like Excel, Word, Outlook, and Teams. Rather than write a complicated formula in Excel or format a graph, you will simply ask CoPilot to do it for you: e.g., “produce a graph showing me monthly sales by product”. Or you can ask Outlook “Give me a summary update of where we are with Project X” and it will scan all your emails and files and give you a summary of the conversations and work that has been done.
What is Next for your organisation?
Not every organisation needs to go out and completely rethink what it is doing. The technology is still emerging, but it is emerging at a rapid pace. You or someone in your organisation should be tasked with understanding and thinking about the potential impacts.
We collectively need to make sure that businesses and organisations in Wales are not left behind.
It is important we all start thinking about what the rapid progress of AI could mean for us, and start thinking about the opportunities and the risks. Go beyond the headlines of students cheating on their dissertations and AI taking everyone’s jobs. AI will not replace you or your organisation anytime soon, but a human or organisation who understands how to use AI might.
Here are a few brief introductions:
https://www.youtube.com/watch?v=reUZRyXxUs4
https://www.youtube.com/watch?v=VqhDnaqhnd4
https://www.youtube.com/watch?v=hLSDcAxmPJg
The Negatives of AI
There is also a lot of press about the negatives of AI and the impending doom. Will AI hasten the destruction of the human race? Probably not. We’ve had enough nuclear weapons to destroy the earth for 80 years and the human instinct of survival has prevented this from happening. But does AI present many ethical and legal issues, can it be used for criminal activity and harm, could it increase the wealth gap between rich and poor and create social upheaval? Yes. But it also has the ability to do good, solve some of the problems of the world and create new prosperity. Like most technological revolutions – the industrial revolution, the internal combustion engine, the internet, and social media – there will be good and bad.
Putting ChatGPT to the test
I thought I would test ChatGPT and show you what it is capable of by asking it to write this month’s CEO Insights column for me. There is some training required to understand how to correctly prompt ChatGPT, so it produces what you want, and below is the unedited output. This took me 5 minutes to produce, as opposed to the hour or two I would normally spend writing the CEO insight column. That transforms my productivity.
Note: the column published above is the version written by me before trying out the ChatGPT version.
How Recent US Bank Failures and Interest Rate Hikes Impact SMEs’ Access to Credit
Small and medium-sized enterprises (SMEs) play a significant role in the UK economy, and their success often depends on their ability to access credit. However, recent events in the banking industry have made it increasingly difficult for SMEs to secure financing. In this article, we’ll explore how the recent First Republic Bank failure and the rise in the US Fed Funds Rate have affected credit availability for SMEs, and what steps business owners can take to navigate the changing credit market.
First, let’s take a closer look at the recent events that have shaken up the US banking industry. In August 2022, First Republic Bank, a mid-sized lender specializing in commercial real estate loans, announced that it had failed due to a large portfolio of risky loans. The bank’s collapse has had ripple effects throughout the financial sector, causing other lenders to tighten their lending standards and reduce credit availability. At the same time, the US Federal Reserve has been raising interest rates, which has further impacted credit markets, making it more expensive for businesses to borrow money.
These events have had a significant impact on SMEs, which often rely on loans to fund their operations and growth. Many SMEs have found it increasingly difficult to secure financing in the current credit market, as lenders have become more risk-averse and are demanding higher collateral and more stringent lending requirements.
Startups, which typically have less established credit histories, have been hit particularly hard by the recent developments in the banking industry. Many are finding it difficult to secure loans at all, while others are being forced to accept higher interest rates and shorter loan terms. Established companies are also feeling the impact, as they may be facing tighter credit limits or higher collateral requirements. Even SMEs with good credit histories are finding it more difficult to secure financing in the current market.
So, what can SME business owners do to navigate the changing credit market? Here are some tips:
- Improve Your Creditworthiness: One of the most important things SMEs can do is to work on improving their credit scores. This means paying bills on time, reducing debt, and maintaining a healthy credit utilization ratio. By improving your creditworthiness, you can increase your chances of being approved for a loan and getting better terms.
- Seek Out Alternative Financing Options: SMEs may want to consider alternative financing options, such as crowdfunding, peer-to-peer lending, or invoice factoring. These options can be more flexible than traditional bank loans and may be easier to obtain.
- Build Strong Relationships with Lenders: Building relationships with lenders can be key to securing financing in a tight credit market. SMEs should take the time to get to know their local lenders and build relationships with them. This can help build trust and make it easier to obtain financing when needed.
In conclusion, the recent events in the US banking industry have had a significant impact on SMEs’ access to credit. Business owners need to be proactive in navigating the changing credit market by improving their creditworthiness, seeking out alternative financing options, and building strong relationships with lenders. While the current credit market may be challenging for SMEs, there are still ways to secure financing and thrive in the current business environment.
Produced by Gus Williams, the Chief Executive Officer at Bevan Buckland LLP