Did you know that neural networks are actually not as complicated as you may think? In essence, neural networks are artificially created structures built into programs that are loosely modelled on the human brain. If you think neural networks are the reserve of ultra high tech companies or projects then think again. In fact, neural networks have a wide range of applications including medicine, customer services and self-autonomous driving and are used for solving many business problems including sales forecasting, customer research, data validation, and risk management.
Below is an example of a neural network typically used for image recognition, used for classification of trading patterns within a market data time series.
How does a neural network learn and classify?
Neural networks generally learn through supervised learning tasks and looking at many examples of labelled data and building knowledge from that data.
A neural network continuously “rewires” itself until it can solve a problem. Because a neural network is made up of neurons (much like the fundamental units in our brains) connected to each other, based on the data it learns from, these neurons will eventually change size to form a correct path.
This path is the same as people would call “understanding”.
Real-life applications of neural networks
There are a huge number of applications. Here are some you may or may not know about:
– Computer vision including image classification, object detection, etc
– Self-driving car technology
– Natural language processing and translation
– Weather forecasting
– Financial market analysis and forecasting
– Classification of data in health care and organisational decision making
– Disease identification and diagnosis
– Optimisation of marketing strategies and development of targeted marketing campaigns
– Improving search engine functionality
– Accurate sales forecasting, stock management and warehousing
– Mortgage, overdraft and bank loan applications
– Insurance policy matching
– Anti-fraud detection systems
– Facial recognition software
In summary
Although neural networks may on the face of it be a complicated concept to grasp, this deep learning tool is changing the way businesses operate across every sector, enabling them to achieve superior performance across a wide array of activities.
