14 Jul 2025
by Tim Palmer

Scaling AI for impact: overcoming challenges to seize the AI opportunity

Learn how a pragmatic, phased approach to anomaly detection, using artificial intelligence, benefits from the strengths of unsupervised and supervised learning.  

In an era where data-driven decisions are pivotal and we’re swimming in high quality data - how do we find value in all this data? 

A pragmatic, phased approach to anomaly detection – whether detecting fraud, system failures or unusual user behaviours - offers a compelling entry point that delivers immediate value while building foundations for more sophisticated uses of your data. 

The colossal volume of data flowing through modern enterprises has rendered traditional manual monitoring approaches obsolete. Financial services companies process millions of transactions daily, or SaaS platforms generate terabytes of user interaction data. Hidden within these vast datasets are the irregular patterns that may signal threats, opportunities or system malfunctions – but finding them cannot be achieved by writing rules or inspecting the data. Enter Machine Learning. 

Many organisations recognise the need to implement AI but struggle with where to begin, often finding themselves caught between overly simplistic solutions and unwieldy, resource-intensive projects. 

Adopting a pragmatic, phased approach 

The most successful implementations follow a progressive methodology that balances exploratory power with production-grade precision: 

Phase 1: unsupervised learning 

Unsupervised learning algorithms provide an ideal starting point. These models excel at identifying patterns in raw, unlabelled data, surfacing outliers that deviate from normal behaviour without requiring predefined classifications. 

This approach offers several advantages for organisations in early adoption stages: 

  • It minimises the initial investment in data labelling and annotation 
  • It surfaces anomalies that human analysts might miss, particularly in high-dimensional data 
  • It provides valuable insights into the nature and distribution of unusual patterns without bias 

Phase 2: analysis and semi-supervised learning 

The outputs from unsupervised models create the foundation for the next phase. By presenting detected anomalies to human experts or semi-automated classification tools, organisations can efficiently create labelled datasets that capture domain knowledge and business context. 

This curation process serves multiple purposes: 

  • It filters false positives and prioritises anomalies by business impact 
  • It translates abstract statistical outliers into meaningful business categories 
  • It creates the training foundation for more precise supervised models 

Phase 3: supervised learning 

With a curated dataset in hand, supervised learning models can be trained to classify anomalies with greater precision and contextual understanding. These models deliver the speed, accuracy and explainability required for production systems. 

The benefits at this stage include: 

  • Real-time classification of anomalies with business-relevant labels 
  • Reduced false positives through targeted training on edge cases 
  • Clear detection logic that can be explained to stakeholders and regulators 
  • Continuous improvement through feedback loops 

Overcoming implementation challenges 

While a phased approach can substantially de-risk AI adoption, it’s worth being aware of some common challenges: 

  • Data quality and accessibility: Fragmented data architectures and legacy systems often impede the creation of unified datasets. Successful organisations prioritise data engineering as a foundation before advanced analytics. 
  • Skills gaps: The shortage of AI talent remains acute across the UK. Progressive organisations are addressing this through combinations of upskilling existing technical staff, strategic hiring, and partnering with specialised consultancies. 
  • Integration with existing workflows: Detection without action creates limited value. Leading implementations ensure anomaly detection outputs seamlessly integrate with operational systems and human workflows. 
  • Governance and explainability: Particularly in regulated industries, organisations must balance detection performance with model transparency. The phased approach naturally builds explainability into the process as human experts validate and categorise initial findings. 

Moving forward: beyond detection to prediction 

For organisations that successfully implement this phased approach, anomaly detection becomes not just a security tool but a foundation for predictive capabilities. The patterns identified through anomaly detection often reveal early indicators of emerging trends, customer behaviours, or system issues before they become critical. 

As businesses continue navigating digital transformation, this pragmatic path to AI adoption offers both immediate operational benefits and long-term strategic advantages - turning the theoretical promise of AI into practical business impact. 

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Associate Director - Technology and Innovation, techUK

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Authors

Tim Palmer

Tim Palmer

CEO, Blue Hat Associates

Tim founded Blue Hat after a number of COO and CTO roles in Banking, Startup and Consulting businesses.

His passion is delivering software that realises the business objectives.

Tim has worked in complex data systems including building low-latency FX trading and enterprise data warehouses. Tim is a trusted advisor and technology leader who transforms business vision into reality.

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