Turning CPAs into Cyborgs with AI
JC (John Colthart): VP of Growth, MindBridge Ai
Artificial Intelligence and Machine
Learning are Changing the World#shifthappens
Quick Recap: What is Artificial Intelligence?
The new AI spring
“Artificial Intelligence is the broader concept of machines being able
to carry out tasks in a way that we would consider “smart”.”Forbes: Dec 6, 2016
Images copyright of the respective copyright holders
2014: DeepMind Q Learner
MindBridge™ Analytics Inc. Confidential
Raw PixelsGame State
Reward (Score)
GameControlsDemis Hassabis
DeepMind Co-Founder
What is Machine Learning?
Supervised Learning Unsupervised Learning Reinforced LearningHuman expert feeds the computer with training data. From that data the computer should learn the pattern.
No expert input, the computer identifies pattern in data and looks for outliers. Particularly useful where the human expert doesn’t know what to look for.
Reinforced learning algorithm continuously learns from the environment in an iterative fashion.
“Machine learning (ML) is a type of artificial intelligence (AI) that allows software applications to become more accurate in predicting outcomes without being explicitly programmed”*
https://searchenterpriseai.techtarget.com/definition/machine-learning-ML
Type of Machine Learning
Big Data coping mechanismsSampling: look at a sample of events and determine if pattern looks acceptable or normal
Data Science: gathering, exploring, and modeling data
Machine Learning: techniques in computing science where a machine can learn from exposure to data in a supervised or unsupervised way
Artificial Intelligence: a field of computer science. Its goal is to enable the development of computers that are able to do things normally done by people -- in particular, things associated with people acting intelligently.
MindBridge™ Analytics Inc. Confidential
3x as many job openings as people to fill them…
83% say they are struggling to find Data Scientists
https://www.datanami.com/2016/03/25/tracking-data-science-talent-gap/
human capital is in short supply...
Data Science is in demand
MindBridge™ Analytics Inc. Confidential
Who’s affected by Artificial Intelligence?
This is the end of ‘tech companies’ … only ‘companies’, steeped in technology will survive*
Naval Ravikant commented, “The rise of the Data era, coupled with software and connected device sprawl, creates an opportunity for some companies to outperform others. Those who figure out how to apply this advantage will drive unprecedented wealth creation and comprise the new S&P 500.”
*Rob Thomas (2016). The End of Tech Companies Image attribution: Kris Krüg
68% of CEOs believe data and analytics will generate the greatest return on stakeholder value“The major trend that all industries face is the impact of technology on every single aspect of a company. Whether it’s enhanced intelligence, from big data analysis to help managing marketing, risk, product creation, or assessment of ideas … technology is going to lead to sea changes in how companies are organized and run across all industries”
Brian Moynihan Chief Executive Officer, Bank of America Corporation, US
the need for Analytics will drives change..Source (PwC 19th Annual Global CEO Survey Published January 2016)Photo © World Economic Forum, Photo by Michael Wuertenberg
Data is changing how business is done
MindBridge™ Analytics Inc. – Confidential
• Insurance: Intelligent Claims ProcessingProcess mining to identify bottlenecks and improve efficiency. Identify patterns of fraud. Build predictive underwriting models
• Legal: Paralegal Powered by AIROSS is an A.I. lawyer that helps human lawyers
research faster and focus more on advising clients
• Healthcare: Watson OncologyEvidence based treatment options learned from world renowned MSK experts. “like having a capable, knowledgeable colleague” working with every clinician
How AI & Machine Learning are changing many professions
MindBridge™ Analytics Inc. Confidential
Source: Association of Certified Fraud Examiners, International Institute of Auditors
Financial Loss – Known vs Unknown
What we see & know~$200B annually
Financial loss due to human error or by intent is surging is ~$3T annually
MindBridge™ Analytics Inc. Confidential
Source: Association of Certified Fraud Examiners, International Institute of Auditors
It’s all the buzz with the Big 4 + 1
MindBridge Analytics Inc. Confidentialhttps://www.accountingtoday.com/news/internal-audit-profession-making-tech-advances-in-cybersecurity-and-data-analytics
Deloitte speaks on Accounting Today
What the ERP companies are up to?
5 Minutes Google about AI, Insurance and Audit…
The CPA Journal, https://www.cpajournal.com/2017/06/26/big-data-business-analytics-implications-audit-profession/
The CPA Journal, https://www.cpajournal.com/2017/06/19/deep-learning-future-auditing/
Diginomica, https://diginomica.com/2017/10/12/ai-big-data-accounting-three-years-evolution/
CFO.com, http://ww2.cfo.com/auditing/2017/02/artificial-intelligence-audits/
https://www.techemergence.com/artificial-intelligence-in-insurance-trends/https://www.icaew.com/en/technical/technology/artificial-intelligence/artificial-intelligence-the-future-of-accountancy
CPA Magazine January 2017
MindBridge™ Analytics Inc. Confidential
Applying AI in the real worldThe MindBridge Story
Augmenting Auditing with Machine Learning AI
Ai Auditor — Risk Based Scoring of Every Transaction
Domain Expertise & Business Rules
Integrity tests, fraud framework, standard fraud analytics
Statistical Methods
Benford’s law, regression,3-digit testing
MachineLearning
Humint Scoring, SOS, rarity, outlier detection, reinforced learning
CrossCorrelation
Sanction Lists, Credit Databases, proprietary negative database
Traditional Vendors
MindBridge Analytics Inc. Confidential
MindBridge™ Analytics Inc. Confidential
How it Works: Ai Auditor™ Features
Smart Data Ingestion
Audit Plan Automated
ExtensibleControl Points
Insights
Materiality Analysis and Drill Down Visualizations
MindBridge Ai AuditorAvoiding the Black Box — Making AI Explainable
MindBridge Analytics Inc. Confidential
Machine Learning Comparison: Real World Fraud
MindBridge™ Analytics Inc. Confidential
Rules Alone: Ranked Risk Score Machine Learning: Ranked Risk Score
“4 of 5 data points your system found were confirmed cases of fraud. Very impressive. Great job."
Recent Real-World Example:In 1.6M Transactions, flagged interesting transaction • Machine Learning 34th
• Rules ~31,000th
900X improvement
MindBridge™ Analytics Inc. Confidential
MindBridge AiCustomer Testimonials
“The machine learning capabilities of MindBridge Ai Auditor are unique in the audit field and go well beyond the capabilities of any data
analytics technology we’ve seen for the full audit profession…”
Thomson Reuters Tax & Accounting
https://www.thomsonreuters.com/en/press-releases/2017/may/thomson-reuters-tax-accounting-reaches-agreement-with-mindbridge-analytics-inc.html
“…MindBridge ranks all of your transactions on a risk rating…that stands up to scrutiny by the regulators…If someone asks me
why we have audited a particular sample, I can explain the computer-based technique which is a lot more robust than saying ‘one of my
trainees picked ten transactions’...”
Kingston Smith
https://www.accountingweb.co.uk/tech/tech-pulse/ai-in-practice-practical-applications-for-accountancy
“…The MindBridge Ai Auditor™ enables our team to pinpoint unusual transactions and enhances the thoroughness and precision of our
analytics…Investigations that have historically involved months of combing through millions of transaction samples are now much more
comprehensive—yet more narrowly focused—and can be concentrated in just hours…”
BDO USA
https://www.bdo.com/news/2017-july/bdo-usa-and-mindbridge%E2%84%A2-analytics-inc-announce-st
MindBridge Ai Auditor™
MindBridge Analytics Inc. Confidential
• Uses Artificial Intelligence AND Machine Learning.
• Purpose built for Accounting industry and exceeding standards.
• An Extensible AI platform to support Audit & Assurance, Forensics,
Advisory Services, etc.
• Detects Anomalies, Irregularities, and Outliers in Financial Data that
are missed with the human eye or a rules based analytics solution.
• Speed, Ease of Use, Granularity & Completeness
• Greater Insight, Cost Savings and Assurance
The world around us is changing
You need to embrace the change and be educated
Analytics is fueling your competitive future
A.I. is in all of our futures
Key Takeaways
–John Bednarek, MindBridge Ai
“AI won’t replace CPAs, but CPAs that use AI will replace the ones that
don’t”
https://www.mindbridge.ai/ai-will-not-replace-auditors-but-auditors-using-ai-will-replace-those-not-using-ai/