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Stepping out of the shadows - Why data science?

John Taylor, IFoA President Elect discusses how actuaries are taking the lead in the emerging field of data science

When a topic generates a cloud of buzz-words ranging from “Big Data” to “Machine Learning” and “Artificial Intelligence” we can be sure that the core issue is one of public interest. Indeed, data science in all its manifestations is rarely out of the public eye as society grapples with the implications of the emergence of an incredibly powerful phenomena.

But why has data science become such an important topic now and why do we believe the actuarial profession should be at the heart of it?  And what can each of us do to keep up with this fast-moving discipline?

The answer to the first question can be found in the coming together of a number of important trends.

The emergence of data science

First, the ‘cometary tail’ of data we all generate as we navigate the modern world is increasing exponentially. Every time we interact online, purchase an item, travel or share our content the volume of data we create proliferates at an incredible rate. In 2015 for example, 90% of the data then in existence was created in the previous two years; a rate that continues to accelerate. 

As well as the sheer volume of data created there are several other ways in which our current production and manipulation of data is being transformed. The variety, velocity, veracity and the value we can extract from this data as our techniques and technologies improve all stand upon inflection-points where the future will be radically different to the past. As a result the rapid development of data science seems set to upend a host of business, governmental and social norms; requiring careful navigation from those skilled in risk mitigation, change management and long-term planning in a rapidly evolving world.

New challenges, trusted ethics

Of course, it could be said that actuaries are the original data scientists, with an approach to “Big Data” that stretches back to the 1700s. Indeed, the fundamental techniques that enable the modern practice of data science are not necessarily new and many of our members would instantly recognise much of the mathematical “wiring” that underpins concepts like machine learning and artificial intelligence.

But what makes the contribution of the profession uniquely valuable to the emerging field of data science is our code of ethics, our public interest mission and our deep understanding of the statistical underpinnings of data science.

This means that we’re well placed to consider the long term implications of a world in which the products of data science inform not just our traditional sectors of insurance, pensions, risk, investment and healthcare, but also drive policy decisions, political outcomes and social trends right across the world. In light of recent scandals from Cambridge Analytica and others, we can see how these powerful tools can be used for a variety of purposes and the public demand for the ethical implementation of data science is high. 

Ensuring the power of the data science revolution can be harnessed fairly and in the public interest is at the heart of the public debate surrounding this field. The UK government is mindful of the potentially large implications and is setting up the Centre for Data Ethics and Innovation to promote the ethical use of data science, build trust and foster innovation; a development we fully support. With centuries of experience in the professional application of data modelling, this is an area in which the actuarial profession can truly take a leading part, building on present leading-edge Actuarial Research Centre programmes such as looking at ‘big data’ to understand longevity and morbidity 

Actuaries taking the lead

Over the summer and autumn of 2018 IFoA Council set out what it called its “Fit for the future” agenda, which sought to look at how Associates and Fellows could best adapt to the emergence of new fields, new ways of working and new practices.

As a result we’re putting in the ground work now in the form of our revised qualification structure and new curriculum to ensure that if data science and all its associated technologies and techniques are to truly shape our lives in the 21st century, then the profession can continue in its unique mission to ensure professional, ethical standards are upheld and risk mitigated. Whether you’re an Associate, Fellow or Student, or just interested in how the profession is taking a lead in this exciting new field you can find a host of resources about data science on our website.

We believe this a vital way in which the profession is already stepping out of the shadows; taking the lead in addressing the issues that will shape our global society, whilst deploying our skills and knowledge to safeguard the public interest.

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