Artificial intelligence (AI) has come a long way since the 1950s when scientists first started exploring problem solving using computers. From the early beginnings of simple neural networks to the growth of Machine Learning, AI technology has touched nearly every industry, the Ffnancial markets are no exception.
Breakthroughs in deep learning and self-teaching algorithms are driving the AI boom we’ve seen in recent years and this has single-handedly revolutionised the financial technology (fintech) and regulatory technology (regtech) markets. Although it's important to embrace technological change, we need to understand how it works and how to use it properly.
First, let's take a step back. According to Forbes magazine, there are many definitions of AI and different industry leaders focus their research in various ways. The English Oxford Living Dictionary describes artificial intelligence as “the theory and development of computer systems able to perform tasks normally requiring human intelligence, such as visual perception, speech recognition, decision-making, and translation between languages.”
Artificial intelligence is essentially the science of training machines to perform human tasks. It allows machines to carry out repetitive high-volume tasks without getting tired. This is incredibly powerful both for optimizing workloads and reducing human error in monotonous tasks. However, the human touch is still essential to ensure its success. Manual inputs both before to set up the system, ask the right questions and after, to analyse the results, to ensure absolute precision.
Nowadays, we put a lot of faith in technology. Is it all good news? We need to understand how far it's come but also its limitations and how to manage them using a variety of methods and techniques.