Qarar CEO Zaid Kamhawi on the big deal about big data

What is ‘decision analytics’, and why should businesses pay attention to it?

“Data today flows into every area of our economy. The volume, velocity and variety of data being generated has given birth to the term ‘big data’ as a reference to datasets whose size is beyond the ability of typical database software tools to capture, store, manage, and analyse.

“At the same time, data on its own does not add value if you cannot extract insight that support value adding decisions. Decision analytics, which involves the application of statistics and modelling to optimise and analyse data, can assist decision makers in extracting meaningful insights about their business, and predict future trends, behaviours and model optimal scenarios. This helps them make better decisions in complex and usually uncertain situations.

“There is strong evidence that big data and analytics can significantly benefit private companies, national economies and individuals, not least by enhancing their productivity and competitiveness, as well as transparency, risk management, fraud detection, and more.

“The ability to store, aggregate, and combine data and then use the results to perform deep analyses has become ever more accessible, and because of this big data and analytics is now a top agenda item for business leaders across every sector.

“The UAE recently announced the appointment of the first minister of artificial intelligence, a reflection of the value that can be created by optimising public services through data and analytics. Many pioneering companies are already using big data to generate value, and others need to explore how they can do the same if they are to compete. In a big data world, a competitor that fails to sufficiently harness data and analytics capabilities will be left behind.”

What aspects of business can be improved or enhanced through decision analytics?

“Data and analytics offer transformational potential with far reaching implications on how organisations are designed, organised, and managed. Some examples include manufacturing, integrating data from R&D, engineering, and manufacturing units to enable simultaneous engineering that can significantly cut time to market and improve quality.

“In marketing and risk management, analytics allows businesses to create highly specific segmentations, and tailor products and services to meet those needs. Even businesses that that have used segmentation for many years are beginning to deploy techniques to achieve real-time micro-segmentation of customers to target promotions and advertising.

“In fraud, analytics have applications that can use automated risk engines to flag candidates for further examination, and in supply management the use of algorithms can be used to optimise the fine-tuning of inventories and pricing in response to real-time in-store and
online sales.”

You work a lot with finance companies – are these your main target?

“As Qarar was born out of the credit reporting industry, our core domain knowledge initially centred on risk and credit. Banks, insurance companies and other financial institutions have been some of the biggest beneficiaries of data and analytics, mainly driven by the amount of structured data the industry collects and processes and by regulatory requirements to develop models that predict risk and calculate capital requirements. This created a culture of reliance on analytics to make more accurate and faster decisions when it comes to their customers.

“Every major decision related to driving revenue, controlling costs, or mitigating risks can be infused with data and analytics. Most banks are using analytics to gain a competitive edge in a cutthroat environment by improving risk assessment and predicting customer behaviour based on a differentiated view of the customer. For financial institutions, data and analytics can also speed up the decision cycles used to observe, orient, decide, and act in fighting fraud. By combining proprietary data sets with industry benchmarks and government information, financial institutions can use artificial intelligence, machine learning, and analytics in the fight against financial fraud.”

How important is it to balance technology and data with the ‘human touch’? What are the limitations of data analytics and what role must humans play to achieve results?

“The concept of big data and what it offers has grown remarkably in scale over the past few years. For this reason, data volumes have become so large and vast that for most people it would be impossible to try and make sense of them without advanced analytics and other data analysis technologies.

“Although there is much debate around artificial intelligence replacing the need for human involvement, it is equally true that there has never been the shortage of data scientists and data experts that there is today. It has become the number one sought after profession but the usual sources of talent are failing to produce enough data scientists.

“The type of skills that are required range from the data strategists, data scientists that combine deep analytics expertise with IT know-how, and analytic consultants that combine practical business knowledge with analytics experience.

“That being said, advanced analytics – specifically those that use machine learning and neural networks techniques – and self-learning have the potential to make decisions that can replace much of the human capital that is employed to make the same type of judgement.

“But while automation and technology has the ability to make our lives much easier and more efficient, we are not yet at a point where it can replace good human judgment.”

What impact is the evolving regulatory landscape having on data collection and usage?

“With more data being collected and processed by organisations in the region, and the explosion in the use of social media platforms, we see a rise in the number of regulations in the region that address the use and governance of data.

“These include data protection laws that exist in in jurisdictions such as the DIFC, the Dubai Law No. 26 of 2015 on the Regulation of Data Dissemination and Exchange in the Emirate of Dubai, and the Privacy of Consumer Information Policy.

“In addition, the rise of incidents of high profile data breaches such as the recent Equifax data breach will bring even more scrutiny on how businesses collect, store and use data. This will compound the onus on data processors to make sure that they only collect data they are authorised to, protect its storage, and use it only for the purpose it has been collected. All of which will require considerable investment on the part of businesses.

“The future might look very different with the rise of blockchain technology, as customer data will no longer be owned by companies and stored in its databases but rather stored in public blockchains. The ownership will shift to the consumer, who grants accessibility to stakeholders. This will likely require a different type of regulatory framework.

Are you pleased with Qarar’s progress in the past 12 months? What are you aims for the coming year?

“Qarar has shown double digit growth over the past four years of operation, and data analytics has great potential in this region as businesses across all industries are moving toward becoming data-driven organisations.

“The risk management space has been a growing area of focus for us, especially in the past two years, as competition among financial services has grown and new regulations like IFRS 9 look to revolutionise the way lenders manage their business.

“Clients are also increasingly exploring other types of analytics, like the use of social media data in credit scoring. This could create further uplift on the predictive power of traditional models, and to enable them to score expats and students that might have established credit histories in the region.

“Our next area of focus will be introducing the use of machine leaning tools and their application to solving different business problems like churn and retention in different industries.”

How important is the development of AI to your work? Are you encouraged by Dubai taking a lead in future technologies like these?

“Big data and AI are powerful on their own and together they have the power to effect disruptive change. Organisations are now combining the agility of big data processes with the scale of AI capabilities to accelerate the delivery of business value. The availability of greater volumes and sources of data is enabling capabilities in AI and machine learning that remained dormant for decades due to lack of data availability, limited sample sizes, and an inability to analyse massive amounts of data in milliseconds.

“This is why many organisations have moved from a hypothesis-based approach to a ‘data first’ approach. Organisations can now load all of the data and let it point the way and tell the story. Unnecessary or redundant data can be culled and more indicative and predictive data can be analysed using ‘analytical sandboxes’ or big data ‘centres of excellence’, which take advantage of the flexibility and agility of data management approaches. As a result, businesses can move faster, experiment more, and learn quicker.

“Accenture claims that 76 per cent of consumers in the UAE are comfortable with the use of AI in their interactions with government organisations and businesses, with 68 per cent of residents having interacted with computer-based applications in the last 12 months.

“And interactions between UAE residents and AI-assisted interfaces are set to increase dramatically. Some 90 per cent of respondents in Accenture’s survey agreed that offering products and services through centralised platforms or assistants will be extremely or very important to the future success of their organisation.

“Considering its plans for Expo 2020, Dubai is on the right track to become a leader in future technologies. The emirate’s smart city initiatives are designed to galvanise innovation in both the public and private sectors, increasing Dubai’s attractiveness to businesses and further growing our portfolio of smart services.”

Big data has been criticised by some as overhyped and not as accurate as it professes to be. How would you respond to such an assessment?

“Big data is not overhyped; it will continue to evolve and won’t be going away. Data has always been a part of the modern economy. Since the beginning of industrial manufacturing and national and global brands, companies have been using data to inform their decisions and business strategies. The difference is that now there’s far more data to collect.

“Big data is ingrained in most of the critical business processes, and is becoming more closely aligned with business functions and requirements. ‘Big’ data is progressing into ‘all’ data, especially as so many devices today are connected to the web and throwing off data, including watches, smartphones, security systems, and even refrigerators and ovens. The Internet of Things (IoT) generates huge amounts of data, and companies are looking into how they can tap into it all. This is proof enough that big data is here to stay.

“Big data in itself cannot be termed as accurate or inaccurate; it is merely huge volumes of available data that needs to be sifted, assessed and interpreted to be of value.”

The issue of ‘privacy’ is also a major part of the big data conversation. Where do you stand on this debate?

“There are huge benefits to big data analytics, but also massive potential for exposure that could cause severe losses to an organisation.

“It’s no secret that data privacy is a huge concern for companies that deal with big data. But most of the debate today revolves around concerns every company has: breaches, discrimination, and unfair analysis.

“Another huge privacy issue is that you know more about people than they know about themselves. Big data analytics introduces the ability to know so much about somebody that it’s frightening. It is important for companies to disclose these powers and subsequently allay people’s concerns. Be very open and transparent about your business with those that you’re analysing, without giving away the corporate secrets that keep you competitive.”