Artificial intelligence, or AI, has transformed from a futuristic tech novelty to a modern-day business tool.
With artificial intelligence, computers are able to take data and “learn” from it, analyzing the data in a way that allows the computer to make accurate predictions and educated decisions.
As the technology has matured, businesses in all industries are working hard to develop applications for AI that will boost their productivity and improve their operations.
And it’s no wonder why: a study by business research group Accenture found that artificial intelligence has the potential to double economic growth rates within the next 20 years, while increasing productivity by 40%.
The international trade sector has quickly caught on to the artificial intelligence trend. With so much data generated by companies, there is ample opportunity to improve trade processes with artificial intelligence.
Here are four ways international trade is beginning to benefit from the technology.
1. Enabling more proactive supply chains
Supply chains already thrive on data from start to finish. Online orders, warehouse packing slip data, and shipping station freight scans can all feed data to a logistics program driven by artificial intelligence.
These programs can provide a variety of benefits to supply chains. They can anticipate supply chain disruptions and formulate plans to compensate. They can predict customer behavior to regulate stock, preventing order shortages or overages. They can also calculate the fastest and cheapest shipping routes and foresee customer cancelations.
Ultimately, an artificially intelligent supply chain is a proactive supply chain, one that is incredibly agile and able to alleviate the impact of inevitable disruptions.
2. Enhancing time-saving compliance software
One of the biggest challenges of international trade is compliance. Companies have to know who they are doing business with and watch for clients, suppliers, or business partners who violate trade restrictions. With those restrictions constantly evolving, compliance can pose a time-consuming challenge to international businesses.
Of course, software already exists to aid with compliance, but that software isn’t always foolproof. It’s prone to false positives and false negatives, which means that human review is often required.
Because of its learning capabilities, artificial intelligence can improve compliance software by reducing the amount of false positives and negatives, thus reducing the amount of additional human review and input necessary to maintain compliance.
3. Creating smarter contracts
Trading generates a lot of contracts. While these contracts take time and money to formulate, review, and comply with, they are often neglected unless a problem arrives. Enter artificial intelligence.
AI can transform trade documents, often entangled in legalese, into useful documents that can help businesses operate more easily within the parameters of the contract, and even reduce the risk of legal issues. Legal-based AI programs can catalog contracts, making sure they are being implemented properly throughout the business.
This helps protect companies from legal risks and ensures that they are also benefiting from the contract with on-time payments and deliveries from clients and suppliers. AI allows businesses to properly execute contracts and avoid risks without devoting a lot of manpower to contract compliance.
4. Increasing access to trade financing
One way AI stands to benefit international trade has to do with how banks approach financing trade-based businesses. An estimated 80% of businesses who deal in international trade take advantage of financing, but it can be hard to come by. Many banks are hesitant to lend to traders due to concerns about trade regulation compliance.
While banks have traditionally required a legion of compliance officers to review loans for international businesses — the expense of which can add onto financing fees — AI can now shoulder the burden of compliance analysis.
Some financial institutions are taking advantage of artificial intelligence platforms to analyze compliance and, with the time and expense of compliance review lessened, can offer more financing options to international businesses.
Artificial intelligence is being hailed as the future of business, from the way companies manage their supply chains and deal with legal issues, to how companies anticipate and meet consumer demand.
Supply chain management, regulations compliance, contract management, and access to financing are just some ways international trade businesses stand to benefit from AI now.
A continued influx of artificial intelligence tools are sure to emerge as businesses embrace and explore the technology.