KPMG has signed a strategic agreement with Sherpa.ai to distribute among its clients the Basque company’s new artificial intelligence (AI) platform, whose main innovation is that it allows algorithms to be trained to be effective and solve business problems without the need to share private data.
The platform, ‘the first commercial federated learning platform in the world’, according to both companies, allows artificial intelligence models to be trained using both external databases and companies’ own data, including internal data that is public, but also data that until now could not be used for privacy reasons.
‘This will help algorithms improve the accuracy of their predictions, which will result in increased sales or cost savings for companies. And if we take it to the health sector, here the benefit translates into saving lives,’ said Sherpa.ai founder and CEO Xabi Uribe-Etxebarria, who said the agreement opens up a huge opportunity for his company to exponentially scale its sales.
For KPMG, too, the alliance represents an opportunity. According to Luis Buzzi, partner in charge of KPMG Innovate in Spain, the agreement ‘marks a before and after for us, as we will be able to offer clients much more efficient algorithm developments and we can really put artificial intelligence at the forefront as a key variable in business development’.
Although the agreement has been sealed between KPMG Spain and Sherpa.ai, it has a global effect. Thus, the aim of the consultancy firm is to offer the Spanish firm’s platform in the 147 countries where it is present, although for a few months it will focus its efforts on the Spanish market, according to CincoDías.
Both partners will start marketing the platform focusing on five sectors (banking, insurance, telecommunications, retail and health) and will target the top 5 companies in each of these industries, and with which KPMG already works, ‘to develop AI models that truly reach a significant part of the Ibex 35.
According to Buzzi, they have already identified several use cases for each of these companies; in total, more than 100 that they will bring to market in a few months. ‘We are going to bring AI out of the mediocrity in which it had settled because of the inability to use the relevant and appropriate data, because of a privacy issue. And when companies understand that now, with the Sherpa.ai platform, we are able to put a telco, a bank and an insurance company to share data without violating regulations to train algorithms effectively, they will see that it is a critical element to improve their business,’ insists the KPMG partner.
Uribe-Etxebarria highlights that in proofs of concept they have done, they were able to increase an insurer’s sales by more than 50 million euros per year with an algorithm. ‘This shows that the developments we make have a direct impact on the bottom line, and this happens in just two or three months,’ he says.
The question is how the Sherpa.ai platform works, with which the two partners want to accelerate the world of artificial intelligence without violating any precepts of confidentiality or privacy and respecting data ethics. According to the company’s founder, the platform works through a central aggregator, which puts a piece of software code in each of the nodes where it works, in order to learn locally and send its results without breaching privacy rules.
In the alliance, KPMG provides knowledge of the clients’ business, “to know where their business processes are most vulnerable and where artificial intelligence can help them most”, and Sherpa.ai, its technology. But to face this new stage of growth hand in hand with the consulting giant, the Basque company is making adjustments to its internal procedures and structure, hiring very senior professionals so that we are scalable,’ says Uribe-Etxebarria.
‘This was a key issue for us,’ acknowledges the KPMG partner, ’because if we go hand in hand with Sherpa to clients, it is important that it meets expectations and, indeed, we see that it is getting ready. Our agreement with Sherpa.ai is not a one-day deal and we have been negotiating the alliance for months, and one of our requirements was that it had to start scaling up so that when we give speed and power to the project they are ready’. The Basque company closed an $8.5 million (7.2 million euros) funding round to accelerate its growth last March.
Do you see a sensitivity in the market towards artificial intelligence and do you think there will be a demand for the platform? Buzzi is clear: ‘There has been a boom in artificial intelligence and everyone has signed up for it; companies have done a lot of pilots, but the problem is that the algorithms they have been presented with have most of the time not given a satisfactory result, and that has led to a lot of disenchantment. But that will change with the Sherpa platform.
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