Uncategorized Digital Twins: Future Drivers of Smarter Decision-Making – International Banker
By Samantha Barnes, International Banker
The concept of digital twins is fast becoming popular in corporate strategy. And as the world’s digital landscape expands, these virtual equivalents will prove ever more important in devising optimal solutions that were previously inconceivable.
So, what is a digital twin? Gartner defines a digital twin as “a software design pattern that represents a physical object with the objective of understanding the asset’s state, responding to changes, improving business operations and adding value”. In other words, it is a digital replica of a real-world entity or system that’s created by software. And by creating a full virtual model of reality, one can achieve much greater flexibility by using the digital twin for test-case scenarios, simulations, making necessary adjustments and even preferentially interacting with the twin instead of the real-world entity.
Many firms and organisations have already begun to experiment with digital twins, typically by collecting data that has been generated by activity in the real world to replicate the digital double, which can then be used for, say, testing during the validation phase of a design process. Indeed, as is the case with many of today’s most exciting innovations, data lies at the heart of digital-twin technology. By collating and analysing consumer data, for instance, companies can often gain deep insights into individual customer behaviours and tailor their offerings more intricately to each customer’s wants and needs.
Combined with other technologies, moreover, digital twins can offer organisations a truly immersive understanding of where things need to be improved. “With the digital twin deployed to its full potential in combination with AI [artificial intelligence], companies enable an entirely new, intelligent and resilient product design capability,” Accenture noted in its October 2020 paper “Digital Twin Done Right”. “The physical manifestation of a product can be pushed closer to the supply chain and closer to the customer. Design and manufacturing cycles shrink from years to weeks, while creativity is unleashed with unprecedented force.”
The consulting firm also cited Volkswagen’s use of digital twins and AI-driven generative design capabilities to cut the design process of a lighter and greener concept version of its iconic VW Bus from 1.5 years to just a few months. “AI dramatically enhances the capabilities of these digital doubles. Our vision of digital twin done right combines AI and automation with data and models within the twin to reimagine and reshape the entire product development process. Here, a digital twin isn’t an end, but a means—together with AI, it enables a new kind of product development: customer-led, highly flexible, and innovation-friendly. A true competitive edge.”
Along with the use of the internet of things (IoT), moreover, digital twins can be used extensively to reduce costs and improve situational awareness, thus helping organisations to make better business decisions. In its July 2020 paper “How Can We Use IoT and Digital Twins to Reduce Costs After the COVID-19 Lockdown?”, Gartner identified four key ways in which the technology was being deployed for these purposes:
“Companies can initially use digital twins to save money simply by improving situational awareness. For example, digital twins can help companies to recognize equipment failures before they stall production, allowing repairs to be made early or at less cost,” the paper noted. “Companies can then save even more money when they further automate their business response to such changing conditions. For example, a company can automatically schedule the repair of multiple pieces of equipment in a manner that minimizes impact to operations.” Indeed, Oracle’s IoT Asset Monitoring Cloud Service application creates the digital-twin version of businesses, including their various groups/subgroups, assets, places and other entities.
Accenture also anticipated digital-twin technology to catalyse digital HR (human resources) strategies. “The employee digital double, combined with artificial intelligence and aligned with HR, talent and business strategies can help maximize business and employee performance, optimise the employee experience (EX), and ultimately improve service levels and competitiveness,” the consulting firm noted.
Given the rapidly expanding digital landscape within financial services, moreover, there is much anticipation over just how transformative digital twins could end up being for the industry. For instance, with customers flowing into bank branches, their activities can be monitored through their smartphones and IoT devices. According to Microsoft, digital twins can identify customers and collect data that enable banks to optimally design their branches in alignment with customer traffic flows.
Targeted advertisements can also be delivered when companies know who and where their customers are, as recently explained by Microsoft digital advisor Andrew Comas. “For example, take a customer who has opted in to having their presence and social media monitored. A digital display in the branch detects the customer’s mobile phone passing by. The digital twin has noticed credit card purchases for new-born items such as a crib and a stroller. It has also checked their social media accounts and sees that they’re expecting a new baby,” Comas described in late October. “On social media, the digital twin sees that a couple will soon have an empty nest. They are probably downsizing, looking for a smaller, more manageable home. By integrating branch data with bank data, new marketing and business opportunities emerge.”
What’s more, COVID-19 has only expedited the migration to the digital realm, with digital banking now widely regarded as the most convenient method for customers. The growing popularity of AI-powered virtual assistants or chatbots is emblematic of this shift. Again, the technology is based on acquiring data from potentially millions of previous customer interactions to provide the ideal support to customers and make optimal recommendations of products and services. With banks now able to glean and procure substantial volumes of customer data that can reveal much about how they interact with various digital banking tools, the potential for digital twins to generate simulations from this data and create more accurate and helpful virtual assistants in terms of solving customer issues cannot be underestimated. As such, the chatbot can be considered the automated digital twin of a real assistant, adeptly handling a multitude of tasks to assist customers.
Banking security is another major area that can be improved by implementing digital twins. With digital banking rapidly becoming the preferred method for financial services, the need for customers to be reassured about their banks’ cybersecurity capabilities while they conduct numerous online financial tasks has become of paramount importance. And the safety of such tasks can be further secured using digital twins, enabling various simulations of potential cyber-attack scenarios to be created. From there, AI algorithms could learn and improve, ultimately training the technology to build a wholly robust defence against an expansive set of potential threats. “Simulation technology for banking service security offers the ability to create simulations that would create virtual cyberattack scenarios the AI could learn from,” Accenture observed in March 2020.
At this stage, it must be emphasised that the technology remains in its infancy. Indeed, Accenture stated that the current uses of digital twins to improve only certain aspects of much larger, more complex processes “barely scratch the surface” of what they can accomplish in the near future. Should they be utilised correctly and more extensively, they could transform the notion of product development so the process not only boosts efficiencies and speeds up development but also opens up a whole new world of options for organisations that could generate a number of new revenue streams.
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