AI Foundations Course Module 1 - An AI Transformation Journey

AI Foundations
Module 1: An AI Transformation Journey
Session 1: An AI Transformation Journey Primer

2
What you
can expect
in this
session
01 Introduction
02 What is AI and Why Is It Important Now?
03 The AI Journey & The Keys to Unlock AI
04 AI in Action: Real World Use Cases
05 Summary & What’s Next

Why We Are Here
Part: 1

4
AI & ML Foundations
AI Foundations
● Intro to Key AI Concepts
● No prior AI knowledge or
background necessary
● No technical or coding
experience necessary
● Exercises: Non-Technical and
introductory
ML Foundations
● Applied AI Concepts
● Some experience with Python
or R would be helpful to
success
● Exercises: Technical and
deeper
In both courses you get access to H2O.ai experts and community makers!
You can earn a badge for AI & ML Foundations by successfully completing the assessments at the
end of each module (not required).
Session: X

5
Session 2: Shifting to the Next Step in the AI Transformation Journey
Study Group
Session 3: AI Transformation and Covid-19
Module 2: Demystifying AI
Module 3: Machine Learning Foundations
AI Foundations Overview
You Are Here
Interested in knowing the full
schedule for the AI Foundations
course? View the schedule on
the community learning site

7
Technical Background & Industry

8
AI Projects & Challenges
Not Currently
Working on an AI
Project
59%

What is Artificial Intelligence?
Part: 2

10
Artificial intelligence (AI)
• A field of computer science that provides the ability for a computer to
learn and reason like humans using several available techniques.
• It is an important field for those who want to extract meaningful insights
from massive amounts of data in a timely and systematic manner
AI & The Role of Machine Learning
AI today is largely powered by Machine Learning (ML)
• ML happens when a computer can take lots of data (examples) and
learn patterns from it to make predictions on new data based on those
learned patterns.

11
AI ML
NLP
Expert Systems
RL
DL
AI is more than just Machine Learning
Math
Optimizations
Grammars
Knowledge and
Graph Systems
Computer
Vision
Robotics
H2O.ai’s AI Glossary
Module: 3

1212
AI Transformation
Why Now?
1950s 1980s
2000s 20202010s
Digital
transformation
AI
transformation
• Math
• Statistics
• Algorithms
• Expensive computing
• Early AI in research
• Expert Systems
• Rules Engines
• CPU and storage
enterprise wide
• WWW
• Search
• IoT begins
• Big Data (Hadoop)
• Rise of GPUs for AI
• Efficient storage
• Faster compute
• IoT miniaturization
• Networks everywhere
• Data science skills
• Public cloud emerges
Businesses are ready for an AI transformation
Perfect storm
✔ Open source algorithms
& frameworks
✔ High performance and
cost-effective compute
& storage
✔ Advanced data science
skills available
✔ More data than ever before
✔ AI can solve complex
business problems
✔ Fast on ramp & cloud economics
Algorithms, Data and Compute become Commodities

13
AI Spans Industries and Use Cases
Wholesale / Commercial
Banking
• Know Your Customers (KYC)
• Anti-Money Laundering (AML)
Card / Payments Business
• Transaction frauds
• Collusion fraud
• Real-time targeting
• Credit risk scoring
• In-context promotion
Retail Banking
• Deposit fraud
• Customer churn prediction
• Auto-loan
Financial Services
• Early cancer detection
• Product recommendations
• Personalized prescription
matching
• Medical claim fraud detection
• Flu season prediction
• Drug discovery
• ER and hospital management
• Remote patient monitoring
• Medical test predictions
Healthcare and
Life Science
• Predictive maintenance
• Avoidable truck-rolls
• Customer churn prediction
• Improved customer viewing
experience
• Master data management
• In-context promotions
• Intelligent ad placements
• Personalized program
recommendations
Telecom
• Funnel predictions
• Personalized ads
• Fraud detection
• Next best offer
• Next best action
• Customer segmentation
• Customer churn
• Customer recommendations
• Ad predictions and fraud
Marketing and RetailMarketing and Retail

Confidential14
Examples of the impact of AI Transformations
…real-time individualized experience
…dynamic yield optimizationBreak then fix
…personalized quality of serviceCustomer service silos
…personalized healthcareMass treatment
…real-time trade surveillanceDaily risk analysis
Mass branding
WITH AIPRE-AI
AI allows
organizations to
shift interactions
from…
Reactive
Post Transaction
Proactive
Pre Decision

The AI Journey & The Keys to
Unlock AI
Part: 3

Confidential16
AI Business Value: A Journey in Four Phases
1 2 3 4Potential Operational Strategic Data-Driven
Enterprise AI Journey
Awareness & Interest
Evaluate Business Value
Technical Evaluation
Point
Deployment
Point
Production
Enterprise Deployment
Enterprise Production
Modern Data Architecture
Industry Leadership
Session: 2

17
Who is on the team?
Business leader, data
scientists, IT professional
Determine the problems you
want to solve with metrics (time,
money, # of customers, etc)
Determine where you have
data, need data, and can
use technology to find
answers and predictions.
Find answers efficiently.
Learn from others in the
data science community
Ask the Right Questions
Data & Technology
Community
Create a Data Culture
Understand and explain the
models. Use leading edge
technologies to guard for
bias, explain a model, and
present this to regulators
Trust in AI
2
1
3
4
5
5 Keys
to unlock AI

Confidential18
Machine learning is as much
a cultural transformation as a
business transformation.
1Who’s On
Your Team?
IT Leader
Business Leader
Data Scientist
Find the right talent within.
Data. Data. Data.

19
Data is the
fuel for AI
TEXT IMAGES
VIDEO AUDIO

20
• Basing decisions on data rather than intuition
• Data-driven decisions + big data technologies = Improved business
performance
Why Data-Driven Decision Making Is Vital
Discover new
meaning in data
Predictive &
actionable insights
Build confidence in
decision-making
Communicate data
stories for impact
Create valuable
Data Products

Confidential21
AI Enables Data Products To Be Created That…
Provide insight
Increase revenue
Open Markets
Improve OperationsCreate new features
Data

Confidential22
Saving Lives
Supply Chain
Optimization
Digital Marketing
Insurance
Underwriting
Fraud Detection
Customer ChurnModel BuildingDebt Scoring
Propensity to
Lease
Bad credit
detection
+
700%
Marketing
Campaign
Effectiveness
$
20M/year
Savings
+
2X
Effectiveness in
Identification
25%
Time Reduction in
Planning
10%
Increase in Sepsis
Detection
$
10M/month
Debit Reduction
$
1.5M/month
Call Center Savings
50%
Time Reduction in
Model Building
25%
Increase
Customer Churn
Prediction
8%
More Accurate
Predictions of Bad
Credit
Winning
with AI

Confidential23 Confidential23
Talent is Scarce
Needs Reality
Session: 2

Confidential24
AI Teams Can Be Organized Differently
Centralized Decentralized Hybrid

Confidential25
Executive Sponsorship Needed for AI to Succeed
Centralized Organization – Hub & Spoke model where the data science
team supplies analytics to multiple business units
AI Teams

Confidential26
Decentralized Organization – Each business unit has its own data science
capabilities

Confidential27
Hybrid Organization – Contains both a centralized AI team, but each
business unit has its own AI capabilities
AI Team

Confidential28
Determine the problems you
want to solve with metrics.
2Ask the Right
Questions
Want to save time?
Want to save money?
Increase customer base?

29
Turning Business Questions to ML Problems

How Much
• How much will each
customer invest?
• How much will each
customer invest each
month?
• What will the cost of
stock X be?
• How will the exchange
rate change next week?
Which One
• Who will default on a
loan?
• Which customer will
churn?
• Which customers can I
upsell?
• Who will pre-pay their
mortgage?
• Which product is a
customer likely to buy?
• How does a customer
feel about a product or
company?
Grouping
• How should we
segment customers?
• What topics are in our
customer feedback?
• Based on similar
customers, what is the
next best offer?
Module: 3

Confidential30
Learn from others in the data
science community
3Communicate.
Community.
Share.
Learn from others.
Participate.

Confidential31
Build or Buy?Open Source?
Cloud on on-prem? Data.
4Technology
Considerations
Determine where you have data, need
data, and can use technology to find
answers and predictions. Find answers
efficiently.

Confidential32
Rich AI Ecosystem - Too Many Choices?
https://miro.medium.com/max/1400/0*j1pqHqSkGg-sS2x4.png

Confidential33
Rich AI Ecosystem - Too Many Choices?
Databases Big Data/Distributed
Computing
Cloud Computing
Programming Languages Business Intelligence Data Science/Analytics/AI
• Typical frontline store
of data (relational,
graph, etc)
• May be hosted in
cloud if volume of data
warrants it
• If data is too big to be
useful for accessing it
you can use big data
platforms for
distributed, parallel,
high-performance
computing
• In terms of accessing,
isolating, cleaning,
transforming data,
these are the big 3.
• Python + R are
consistently used for
DS & modeling
• Most common
resources for
descriptive statistics
and dashboarding
(specialize in
descriptive stats)
• For predictive & advanced analytic
insights use Data Science/AI
platforms (and py+R) to apply the
highest quality methods.
• Cloud computing may be needed
to run heavy math for these
models.
Module: 5
ML
Foundations
ML
Foundations

Confidential34
Regulations.Explain.
Document. Humans.
5Trust in AI
Understand and explain the
models. Use leading edge
technologies to guard for bias,
explain a model, and present this
to regulators

Confidential35
How Can You Build Trust in AI?
Data Scientist
Why did they do that?
Why not something else?
When will customer churn?
When will customer not churn?
When can I trust you?
What if an attribute changed?
How do I correct an error?
Training Data
Learning Function
Training Model
Output / Scores
Customer Churn
Customer Activity
Learning
Process
Module: 6

Confidential36
Why Does Machine Learning Explanation Matter?
I understand why
I understand why not
I know when customer will churn
I know when customer will not churn
I know when to trust ML model
When can I trust you?
I know what influences the prediction
I know why you erred
Training Data
explainable
model
Explanation
Interface
Customer Churn
Customer Activity
New
Learning
Process
Business Analyst

AI In Action: Real World Examples
Part: 4

Confidential38
AI is a Journey!
For You and For Enterprises

Confidential39
AI Journey at PwC
3. Digital Transformation
Digital Transformations enabled PWC
to generate new, larger insights with
more dynamic data
1. Talent Challenges
PWC needed a rapid & innovative
approach to attrittion and upskilling
2. Manual Limitations
PWC Auditors were stuck doing far too
many repetitive and redundant tasks, that
were prime for automation
4. The Future + AI
PWC wanted to leverage the
foundation built through digital to
identify high-value, innovative use
cases leveraging AI alongside H2O

Confidential40
GL.ai
2015-2017
• Co-innovation with
H2O.ai
• Saved months or
even years
pinpointing errors,
reducing risks and
finding fraud
immediately
• Enables PWC
experts to work on
high risk
situations, not
mundane tasks
A
Multi-Ye
ar AI
Journey

Confidential41
cash.ai
2018 to today
A
Multi-Year
AI
Journey
• Driving audit quality,
accuracy and reliability
with intelligent
automation and AI
• Pilots are live today
• PwC is re-imagining
audit
• Finds anomalous
behavior in near
real-time

Empowering PwC to be an Award-Winning AI Company
“The reason this is such a brilliant tool is
its ability to look at different risks, in
context, at the same time. For example,
it would be uneconomical for an auditor
to look at every single user’s pattern of
activity to decide what’s unusual. With
GL.ai, the algorithms do it for us.”
“
Gary Rapsy
Global Assurance Disruption and Innovation
Leader at PwC
“Part of the reason for wanting to work
with H2O.ai is the passion and
purpose around advancing finance and
democratizing AI for Finance.”
“
Laura Needham
Partner, PwC UK

Confidential43
Wells Fargo has an Enterprise-wide AI Initiative Underway
100+
Data Scientists on
Driverless AI across
business units
Trust
Using MLI to explain
results to consumers
and regulators
“H2O.ai has the best and fastest GLM.
They listen to us, and are addressing our
needs. I am very impressed.”
Agus Sudjianto
EVP, Head of Corporate Model Risk
Wells Fargo
Anti-money laundering
Predictive Banking
Consumer 360
Personalized Banking
Transactions
Financial Decision Making
Consumer spending insights
Credit Card Fraud
Data Quality
Use Cases
“ Time Savings
Decreased
deployment time

Confidential44
A Decade of Data Science at Nationwide Insurance
45+
Centralized data
science team using
H2O.ai
Millions $
Annual savings
“H2O.ai provides us the power and
flexibility we need to solve business
problems with machine learning. We are
able to do more with less and do it faster.
Our results are proof of the power of AI in
action.”
Shannon Terry
Vice President, Predictive Analytics
Customer churn
Customer retention
Call routing
Risk segmentation
Business segmentation
Fraud
Underwriting
Customer expansion
Customer 360
Use Cases
“ 25 Billion
Scored from 500K
models instantiated
in 10 years

Confidential45
Capital One Transformation Yielding Results
Customer
Satisfaction
Using AI to streamline customer
calls and answer questions bette
New Business
Established a new revenue
stream with new data
products
“H2O.ai worked closely with Capital One
on not only identifying opportunities in
our business, but they were a true
partners in transforming our business
and leading us to the path of data and AI
transformation.”
Karthik Aaravabhoomi
Former Capital One Transformation Leader
Cybersecurity
Anti-money laundering
Predictive Banking
Consumer 360
Personalized Banking
Transactions
Financial Decision Making
Consumer spending insights
Credit Card Fraud
Data Quality
Use Cases
“ $ Tens of Millions
Enhanced and personalized
transactions saving millions of
dollars

Confidential46
Major US Telecom Creating a Model Factory
100+
Models in production
in a model factory
Trust
and regulators
“Driverless AI is giving amazing results
in terms of feature and model
performance.”
Customer subscriber churn
Recommendation engines
Network anomaly detection
Fraud detection
Campaign optimization
Customer propensity
Next best offer
Tower placements (5G)
Predictive Maintenance
Use Cases
“ Time Savings
Distributed data
science team getting
results faster

Confidential47
Leveraging AI for Bond Pricing
5
50+
Leverage AI to buy
personal loans for funds
and separate accounts
“H2O Driverless AI speeds up machine learning
by automating our data science workflow. With
the new recipe capability, we can extend and
customize the platform to meet our needs, such
as estimating the prepayment risk of underlying
loans in fixed-income assets like
mortgage-backed securities. Driverless AI is
helping us accelerate our AI journey.”
“
Chris Pham
Senior VP Data Management and Data Science
Franklin Templeton
Customer segmentation
Next Best Offer
Loan Default Prediction
Buying Pattern Prediction
Exchange Rate Prediction
Investment Prediction
Customer Sentiment
Use Cases
Business Groups
Using AI
Data Scientists
on Driverless AI
Millions $

Confidential48
Using AI to Deliver Fresh Fruit in the Fastest Possible Way
Speed
2
Leverage AI to find the
fastest route to reduce
spoilage
“We are getting great results with
H2O Driverless AI. What once took
us 3 to 5 months using traditional
data science methods, can now be
done in 3 to 5 weeks without
having to add any additional data
scientists to the team.”
“
Gonzalo Bustos
Head of Data Analytics
Hortifrut
Supply chain transportation
optimization
Perishable predictions
Reducing claims
Use Cases
Reduction of modeling
time 3 to 5 months to 3
to 5 weeks
Data Scientists
on Driverless AI
Millions $
PRODUCER AND DISTRIBUTOR OF 25% OF THE WORLD’S BERRIES

Confidential49
Protecting Your Assets with AI
“After evaluating several solutions
in our search for the ideal AI
platform, we chose H2O.ai
because it provides us with the
transparency we needed into our
machine learning processes,
much more flexibility than the
other tools we evaluated, and the
strongest machine learning
explainability capabilities on the
market. H2O.ai provides new
avenues of innovation and allows
us to build quality and insightful
ML tools for our business
stakeholders.”
“
Andrew Langsner
Underwriting
Customer experience
Claim evaluations
Inventory stocking
Loss prevention
Lifetime value of a customer
Use Cases
Engagement
Increased customer
satisfaction (both the
insured and the retailers)
Trust
and regulators
$ Millions
Increased insurance
policies with both
consumers and
retailers

Confidential50
Improving Leads to Leases with AI
95%
85%
Monthly savings on
marketing expenses
for Real Estate clients
“Driverless AI helped us gain
an edge with our Intelligent
Marketing Cloud for our
clients. AI to do AI, truly is
improving our system on a
daily basis.”
“
Martin Stein
Chief Product Officer
G5
COVID-19 impact on senior
housing
Sentiment analysis
Customer call center
predictions
Use Cases
Level of accuracy of
leads to leases
Leasing agents now
have qualified leads
85% of the time
$1.5M/ month
REAL ESTATE MARKETING

Confidential51
Driving Marketing Engagement with AI
700%
11%
Model training time
savings
“Driverless AI has made it easy to
try AI solutions in our own
environment and context. It
allowed us to quickly see the
benefits in our domain. Driverless
AI has cut down the overall
model development time in
about half. ”
“
Scott Pete
Director of Analytics and Insights
Predicting churn
Fraud detection
Next best experience
Brand marketing campaigns
Use Cases
Marketing campaign
cost savings and
effectiveness
ROI on marketing and
loyalty programs
25-30%
BRAND LOYALTY AND MARKETING

What’s Next?
Part: 5

Confidential53
• AI is not only ML & doesn’t exist without data
• AI Transformation requires a journey through the phases of maturity:
– Potential
– Operational
– Strategic
– Data-Driven
• Unlocking the value of AI Requires:
– Resources: Data & Talent
– Asking the right question for the problem you are solving
– Communication & Community
– Getting the right technology in place
– Building trust in the use of AI
What We’ve Covered So Far
Recording will be
posted w/in 2
days

Confidential54
1. The next session Shifting to the Next Step in the AI Transformation Journey will be held on
Thursday July 2, 2020 @ 7:00AM PDT
2. There’s a special session on Monday July 6, 2020 @7:00AM PDT on AI Transformation Stories
related to Covid-19.
Upcoming Sessions

Quizzes & Study Groups
• Each session within a module will have a small quiz to complete and all
quizzes for that module will be due before the next module starts.
• There are 2 options available for you to ask additional questions or get
assistance on AI concepts covered in the sessions:
– A Study Group for each Module will be held on Saturdays @ 7:00AM PDT
– Ask Me Anything will be held on Sundays @7:00AM PDT
• Reminder: Don’t forget to complete Quiz 1: An AI Transformation
Journey by Tuesday July 7, 2020 to earn your badge!

Additional Resources
H2O.ai’s AI Glossary

AI Foundations Course Module 1 - An AI Transformation Journey

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