Personalize the user experience, but abide by data privacy laws; and watch out for more AI fiascoes, say FICO experts.

According to GSMA Intelligence, the proliferation of smart mobile devices was one of the biggest technology breakthroughs of the last decade. The rapid growth has since led the telecommunications sector to push for 5G, that will finally become a reality in 2020 for several markets in Asia Pacific (APAC). In other markets where 5G deployment is years away, the focus lies on other areas such as payments and digital identities.

As is customary this early part of the new year, experts at predictive analytics and data specialist FICO have shared their thoughts on four areas that will potentially impact Communication Service Providers (CSPs) in a big way this year:

1. A brand-damaging AI project will make headlines

Artificial intelligence has certainly reached the top of the hype curve in the last few years. According to IDC, APAC’s telecommunications sector was mentioned as one of the top industries that would see the fastest growth in AP expenditure. However, the deployment and use of AI could well have unintended consequences. As outlined recently by Scott Zoldi and Kate Crawford at FICO World 2019, algorithmic bias can creep into decisions made by AI.

For example, if AI is used in the hiring process, the algorithm might look at previous employees that were successfully hired at the company. If the company is not very diverse to begin with, this can lead the machine to conclude that it should only look at hiring individuals that share similar working histories or traits to those that have been employed previously. This perpetuates the lack of diversity.

Going back to an example this year, when Apple launched their credit card in the U.S, they issued smaller lines of credit to women than men. There was a lack of clarity on how the algorithm worked. Said Mel Prescott, Telecoms Practice, Principal Consultant, FICO: “Given the current lack of control and governance around AI, and the fact that even Apple can mess up, it is conceivable that a large CSP will deliver a project that drives unexpected results and adversely impacts customers as an outcome of poor data science rigour.”

2. Financial inclusion initiatives will boost monetization of GSM data

Mobile for Development remains one of the pillars for GSMA’s strategy, be it for financial or digital inclusion or to reduce the gender gap of mobile ownership and use within developing markets. The ability to offer financial products where there is little to no credit bureau, yet almost ubiquitous phone ownership, offers opportunity for both CSPs, financial services institutions and consumers.

Telcos have been raving about the potential of monetizing their data assets, but have had to tone down due to evolving data privacy implications or regional regulations. Operators should be looking through a different lens and offer their customers more digital financial inclusion initiatives, in return for the legal and judicious use of their data.

3. CSPs will start to centralize group-level decision platforms

As the practical use of advanced analytics becomes more widespread, so will the consideration and adoption of platforms that are able to execute based on machine learning. These decision management platforms can be applied across the customer lifecycle, including Network Function Virtualization (NFV) / Software-Defined Network (SDN), customer onboarding, loyalty and retention and customer care. Over in Asia, Indonesian telecommunications provider Telkomsel has deployed chatbots to answer most customer queries. 

Several large CSPs have numerous companies across the group, with many local installations of such platforms. These groups will begin to evaluate how cloud-based scalable decision platforms will enable consistency across the organization, reduce the overall cost and complexity of vendor management, plus allow centralization to become a reality. A standardized approach to decision management will also help to streamline centralization and facilitate activities.

4. CSPs will start getting better at personalization

How well does your telco know you? With various distribution channels such as mobile and web becoming more integrated, telecommunication organizations now have the chance to take customer engagement to the next level and accelerate the user experience.

According to McKinsey, advanced analytics will serve as an enabler for telecoms to cross-sell value added services. Given how users are comfortable with Netflix and Amazon taking personalized marketing up a notch, telcos should try to personalize offers through a decision-making platform powered by prescriptive analytics to engage with their audiences.