GenAI In Finance: 🚨HYPE ALERT IS ON ELEVEN🚨
I love AI, I hate the hype.
The OECD Rolls out a great read on GenAI and its impact in finance. I like it because it makes it clear that the hype around AI far exceeds the reality.
We all agree that GenAI is a game-changer. Still, given how new the tech is, it is a stretch to expect it to be immediately rolled out to start changing our financial world.
Let’s face reality: banks and finance are conservative and aren’t letting GenAI out of its cage until it is completely tamed!
👉TAKEAWAYS:
Today’s takeaways will focus on two quotes from the OECD that counter the hype:
“Despite the hype around GenAI, advanced use cases of AI in financial markets involving full end-to-end automation without any human intervention remain largely at development phase, if any.”
As of today, GenAI and LLMs are being deployed as tools to assist financial service provision (e.g. content generation, summarisation of documents used by financial advisors, human resources processes)
Yes, GenAI will make it to front-end use cases, but that isn’t happening yet!
The expectation that it should happen now ignores all risks to banks that have a high duty of care for ethics, accuracy, explainability, and customer service!
“Such slow-paced deployment of GenAI by financial market participants could be attributed to the fact that finance is a highly regulated space (including model governance and risk management), as well as to the significant risks that GenAI involves in terms of false or deceptive outputs or other adverse consumer impact.”
The premise that the development of GenAI by banks or financial services is “slow” is wrong.
Banks cannot be expected to roll out untested AI tech on clients as though they were guinea pigs.
The very notion that banks are slow underestimates the damage to clients that an ill-trained or hallucinating AI might cause
👊STRAIGHT TALK👊
I credit the OECD for tackling the hype surrounding GenAI’s use in finance.
It would be easy for GenAI fans to call the OECD a “Cassandra,” or prophet of disaster, or even a Luddite. That would be a mistake.
GenAI is already adept at generating personalized material used to commit bank fraud. When it gets even smarter, you can bet it will be used to manipulate markets. It could do this now by spewing out some fake news!
Should we also ignore the lack of explainability for GenAI systems? What do you tell someone rejected for a loan or other service? “I don’t know, the AI says so” doesn’t cut it.
The OECD doesn’t mince words, and I don’t think they should be penalized for being candid. They advise caution, and I think that they are on target.
GenAI adoption should proceed cautiously in financial services because for all the good GenAI can do, it can do equal amounts of bad.
Love AI, but stop the hype.
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