I’m reading a lot on this topic and I cannot understand it
In: Technology
One of the best examples I saw was presented on a PBS Frontline documentary on artificial intelligence. In China, there is a micro-lending platform (phone app) through which people can request small loans for whatever purpose. The applicant puts in just a few pieces of information and before they even finish, the app has determined whether they should get the loan. Because of the amount of data that it researches (over 1,000 data points), it is more reliable than an old-fashioned loan officer, who might look at 10 data points (characteristics) of the applicant.
By looking at data on a massive scale, you can see more patterns, which helps you predict outcomes better. In the case of the Chinese loan app, there is a strong inverse correlation between the person’s ability to pay back their loan and the battery percentage remaining on their phone at the time they applied. In other words, if you’re phone is almost out of battery, you are more likely to default on your loan and likely to be a riskier person in general. Without big data analytics, that tidbit might never have been discovered. So big data can be useful in making sure people do not default on their loans, which is costly for everyone involved.
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