Technology

Blockchain & AI: Enhancing the User Experience while Ensuring Data Privacy

Artificial Intelligence can significantly enhance the user experience in many ways, but algorithms rely on personal user data. A combination of AI and Blockchain can enable customization while ensuring users own and control their private data. 

Missed out on the first article of AI & Blockchain Series? Read more on how these two technologies are the key players in the 4th industrial revolution!

For most of us, Artificial Intelligence (“AI”) is still a somewhat abstract concept. But already today, AI is playing a significant role in our daily lives, even though we might not always know it.

The big tech giants like Alphabet, Apple, Facebook, or Microsoft have all heavily invested in AI and have rolled out innovative features within their products which leverage the technology.

We have long passed the point where AI was a futuristic idea of researchers in an ivory tower. Instead, the technology has enabled practical solutions. Think of prosthetic legs, for example, a use case where AI interacts with users directly.

In a subtler context, we also deal with AI daily when engaging in eCommerce or dealing with simple website services like chatbots.

AI achieves high levels of customization by gathering and analyzing user data

According to Gartner, by 2020, 85% of interactions between customers and retailers will happen without a human being involved in the retailer’s side. Virtual assistants and chatbots will take over most of the communication, which will drastically cut retailers’ headcount and HR costs.

Today, AI is giving product recommendations on most of the bigger eCommerce portals. Amazon’s item-to-item collaborative filtering algorithm provides tailor-made content direct to the homepage as soon as the user arrives, which increased the company’s sales by 29 percent.

AI uses customers’ historical browsing data, their search history, location data, and more to adapt recommendations and then delivers them to the customer via different channels. It doesn’t work without data and protecting the users’ right to this data is a major challenge.

AI enables customization, blockchain ensures data privacy

Companies can use the data gathered and analyzed by artificial intelligence to enhance the user experience, no matter what the application is. More personalized user interfaces, more direct communication, customized products, and better search engine results are in the users’ interest.

But during this process, users don’t want to give up on their privacy – and they don’t necessarily have to. Blockchain could be the technology that enables both a unique user experience and maximum data privacy.

Blockchain can, for instance, compliment AI-based search engines to protect user data while still ensuring optimal search results. It wouldn’t be much different from Google, just that in this case, the user would own and control his data.

On the other hand, blockchain could also protect retailers from non-compliance and the resulting fines. In the European Union, for example, data protection laws prohibit retailers from sending out marketing emails or making cold calls to customers without their prior consent – but AI often does this automatically.

Blockchain-based services can record customers when signing online consent forms and store this data on a blockchain. Retailers can then later pull out this data when it comes to a court case. An excellent example of a blockchain- and AI-based application that work hand in hand.

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Lukas Hofer

Lukas J. Hofer is a business writer and has years of experience in financial services and international business. He has a proven track record working with leading international companies and currently works as independent business consultant in Asia.

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