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Predictive Analytics and “Nudge” Technologies Transform Customer Interaction

Lux Research

With a potential market of up to $10 billion, these technologies have applications ranging from personal assistants and fraud prevention to manufacturing
and health care, Lux Research says

BOSTON, MA – October 4, 2016 – Predictive analytics (PA) is rapidly emerging from experimental labs on to the real world with the promise of fighting fraud and traffic, with smarter virtual assistants and chatbots to boot, according to Lux Research.

A branch of artificial intelligence (AI), PA studies patterns in historical, current and even real-time data to predict future states of a system, and alerts users or sometimes simply steps in to ensure positive outcomes.

“Critical evolution happening now in PA is transforming the space from passively observing and identifying future scenarios, to actively influencing factors that will drive the observed system to a particular outcome,” said Mark Bünger, Lux Research Vice President and lead author of the report titled, “The Future We Want: Directing Customer Behaviors with Predictive Analytics and Nudge Technologies.”

“So-called nudge technologies, in particular, are geared toward influencing human attitudes and behaviors, a huge technical and ethical leap,” he added.


Lux Research analysts studied PA and nudge technologies, while evaluating startups in several domains with distinct applications. Among their findings:

  • Market could be worth $10 billion. Analysts estimate the PA market at $2 billion to $10 billion, growing at 25% to 35% annually. There are an estimated 300 developers, from startups like Flutura Solutions to academics like the Alberta Innovates Centre for Machine Learning and open-source initiatives like Predictive Model Markup Language.

  • Internet of Things is a driver, too. PA is rapidly advancing in deterministic, connected devices throughout the Internet of Things (IoT). These include predictive maintenance (PdM) of mechanical equipment, safety and efficiency of intelligent buildings, and management of energy demand and supply.

  • Smarter virtual assistants will emerge. PA is also behind diverse efforts to make personal assistants such as Siri a lot smarter, and powers the development of chatbots that will eventually displace or replace the touchscreen interface. For example, Viv, which has ties with Siri developer SRI International, is bidding to create an AI-based virtual assistant that can answer any question by generating brand new pieces of code on the fly.

The report, titled “The Future We Want: Directing Customer Behaviors with Predictive Analytics and Nudge Technologies,” is part of the Lux Research Future Platforms Intelligence service.