All industries are set to be impacted by Artificial Intelligence (AI) or have already experienced some form of disruption. However, some will reap more gains than others.
A recent McKinsey report found that AI could create US$3.5 billion to US$5.8 trillion in annual value across 19 specific industries.
Many of these, but not all, are represented on the ASX and they have undergone value-adding technological shifts before.
The travel industry has come out on top with McKinsey predicting an incremental value benefit of 128 percent for the industry. The second industry with the most to gain from AI it says, is transport, at 89 percent.
One ASX-listed company expanding into these fields is LiveTiles (ASX: LVT). The Australian-founded, but now US-based, software company have launched a new “Gate Agent Assistant Bot” to help airline staff respond to queries faster by obtaining information from the airline’s database quickly. No longer will gate agents have to go back and forth with back office workers while customers are waiting at the gate.
Among the other industries where there is potential for AI to drive gains are the retail segment at 87 percent, the oil and gas at 79 percent, agriculture at 55 percent and banking at 50 percent.
One example in retail is utilising data analytics and machine learning to predict consumer purchasing patterns. Inventory managers can use this to more accurately predict how much produce to order.
In the oil industry, AI can help with data collection, system controls and geoscience analysis. This can help improve efficiency and productivity in an industry where capital costs are particularly high.
When one thinks of AI in banking it is easy to think about ‘neobanks’ such as Volt, 86,000 and Xinja. AI is their very essence. But even traditional banks have been engaging with AI. The Commonwealth Bank and NAB have both launched innovation hubs where they experiment with AI. Last October, NAB experimented with an ATM that utilised facial recognition technology.
Some industries stand to make better gains than others – and McKinsey says the success is down to how the tech is integrated.
Star Investing has a commercial partnership with some companies mentioned in this article. This content does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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