turning cpas into cyborgs with ai · this is the end of ‘tech companies’ … only...

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

https://www.forbes.com/sites/bernardmarr/2016/12/06/what-is-the-difference-between-artificial-intelligence-and-machine-learning/

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.


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


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

http://www.weforum.org/

• 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


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


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

https://www2.deloitte.com/content/dam/Deloitte/us/Documents/audit/us-audit-deloitte-leverages-ai-and-analytics-for-audits.pdf

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


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


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


Machine Learning Comparison: Real World Fraud


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 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™


• 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/

Thank You!

John Colthart (JC)[email protected]

General [email protected]