Unit II Applications of AI

• Healthcare, Finance, Retail, Agriculture, Education, Transportation.

Introduction Artificial Intelligence (AI) is the science of creating machines that can think, learn, and make decisions like humans.
It has become one of the most powerful technologies in today’s world. AI is not just about robots or futuristic machines — it is already around us in daily life:

• Mobile assistants like Siri or Google Assistant
• Navigation systems like Google Maps
• Online shopping recommendations on Amazon or Flipkart
• Banking fraud detection systems

Overview of AI Applications AI is widely used in almost every sector. Some major areas are:

• Healthcare – AI helps in disease detection, drug discovery, surgery, and epidemic prediction.
• Finance – Banks use AI for fraud detection, loan approval, and investment decisions.
• Retail – E-commerce websites use AI to recommend products and manage stock.
• Agriculture – AI helps farmers with crop monitoring, pest detection, and smart irrigation.
• Education – AI personalizes learning, automates grading, and provides virtual tutors.
• Transport – AI is used in self-driving cars, smart traffic control, and logistics planning.
• Entertainment & Security – AI recommends movies/songs, powers smart homes, and strengthens surveillance.

AI in Health Care

Healthcare means taking care of people’s health through diagnosis, treatment, and prevention of diseases.
It involves doctors, nurses, hospitals, laboratories, and medical research. Traditionally, healthcare depends on human skill and experience. But sometimes, mistakes can happen or resources may be limited.

AI is now helping healthcare become more:

• Accurate – detecting tiny signs of disease.
• Fast – saving time in tests and drug discovery.
• Affordable – reducing costs for patients.
• Accessible – reaching people even in rural areas.

Why AI?

• Early Disease Detection – AI can identify diseases like cancer, diabetes, and tuberculosis earlier than human doctors sometimes.
• Error Reduction – Unlike humans, AI does not get tired and can carefully analyze data.
• Handling Big Data – Medical science produces huge amounts of data. AI analyzes it quickly.
• Faster Drug Development – AI can suggest possible medicines within months instead of years.
• Support in Rural Areas – AI chatbots and mobile apps guide patients where doctors are not available.

Applications of AI in Healthcare

Disease Diagnosis

• AI studies X-rays, MRIs, and CT scans to detect diseases like pneumonia, fractures, and tumors.
• Example: Google AI detects diabetic eye disease (diabetic retinopathy) from retina scans.

Drug Discovery

• AI suggests chemical compounds that can work as medicines.
• Example: During COVID-19, AI was used to test existing drugs for effectiveness.

Surgery Assistance

• AI-powered robots assist doctors in delicate surgeries.
• Example: Da Vinci Surgical Robot is used worldwide.

Virtual Health Assistants

• AI chatbots remind patients about medicines and appointments.
• Example: Practo app in India uses AI for patient support.

Epidemic Prediction

• AI models predict how diseases will spread in society.
• Example: AI system BlueDot predicted the COVID-19 outbreak before WHO issued alerts.

Challenges While AI is very useful, it also faces challenges:

• Data Privacy – Patient records must be kept safe; AI systems may misuse sensitive data.
• High Cost – Setting up AI machines and robots is expensive for hospitals.
• Dependence on Data Quality – Wrong or poor data leads to wrong results.
• Job Concerns – People fear AI may replace doctors/technicians.
• Ethical Issues – Decisions about human life must be taken by doctors, not machines.

AI In Finance

Finance means managing money: saving, investing, lending, borrowing, and spending.
Every individual, family, business, and government depends on financial systems such as banks, insurance companies, stock markets, and digital payments. Traditionally, financial decisions were taken by humans like bankers, accountants, and stockbrokers. But today, the financial world is very large, fast, and produces huge amounts of data every second, which humans cannot process alone.

This is where AI helps:

• Analyze big financial data
• Detect fraud and risks
• Provide investment advice
• Improve customer experience.

Why AI?
AI is used in finance for the following reasons:

• Fraud Detection Identifies suspicious transactions (ATM card theft, online scams).
• Speed and Efficiency AI can analyze millions of transactions per second — faster than humans. Cost Reduction Banks save money by using AI chatbots instead of human agents for basic queries.
• Personalization AI provides tailored financial advice based on customer spending habits.
• Risk Management AI predicts which loans may fail and helps banks make safer decisions.

How AI Works?

• AI collects customer data (transactions, credit history, income, spending patterns).
• It uses machine learning models to find hidden pattern.
• Based on these patterns, it can:
  • Approve or reject a loan
  • Suggest investment opportunities,
  • Alert when unusual activity occurs in an account.

Applications of AI

Fraud Detection and Prevention

• AI monitors banking transactions in real time.
• Example: If your debit card is used in two cities at the same time, AI immediately blocks it.
• Helps reduce online scams, money laundering, and identity theft.

Loan and Credit Decision Making

• Traditionally, loan officers checked salary slips and documents manually.
• Now, AI can check credit history, income stability, and spending patterns instantly.
• Helps banks approve loans quickly and reduce risk.

Algorithmic Trading

• Stock markets change every second.
• AI-powered systems make buying/selling decisions automatically.
• Example: AI trading bots analyze global news and trends to predict stock prices.

Customer Support (Chatbots)

• AI chatbots like SBI YONO, HDFC EVA, ICICI iPal answer customer queries 24/7.
• Example: Balance inquiry, transaction status, loan eligibility.

Personal Finance Management

• AI apps like Paytm Money, ET Money, Zerodha, GPay help users track expenses and investments.
• They suggest saving plans, insurance, and mutual funds based on income.

Insurance Industry

• AI predicts accident risks, calculates insurance premiums, and checks false claims.
• Example: Car insurance companies use AI to analyze accident photos and decide compensation quickly.
• Applies to life insurance as well.

Challenges:

• Data Privacy Issues - Financial data is very sensitive; hacking or misuse can cause huge losses.
• Bias in Decision Making - If AI is trained on biased data, it may unfairly reject loans.
• Job Losses - Many traditional banking jobs may be replaced by AI systems.
• High Cost of Implementation - Small banks may not afford AI-powered systems.
• Dependence on Technology - If AI system fails, it can disrupt millions of transactions.

AI in Retail

Retail means selling products or services directly to customers. It includes: · Supermarkets (Big Bazaar, Walmart, Reliance Fresh, Shopping malls, · Online stores (Amazon, Flipkart, Myntra), . Local shops.)