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Updating our understanding of the power of artificial intelligence

A look ahead to the AI in Finance Summit, organized by Re-Work

Some of the predictions made about the projected effects of artificial intelligence on the financial sector are simply staggering. 

AI is expected to generate additional revenues of anywhere between $500 billion and near-enough $1 trillion to the global economy, according to various forecasts.

For specific details on exactly how AI is being applied by individual companies, one can look at the information provided by the Re-Work organization. 

Re-Work specializes in organizing conferences about AI and its various sub-branches, such as machine learning and deep learning.

The next most relevant event, the Re-Work AI in Finance Summit, is scheduled for the first week of September, in New York, and has already confirmed more than a dozen speakers from top institutions including:

  • US Securities and Exchange Commission;
  • The World Bank;
  • Bank of America Merrill Lynch;
  • Morgan Stanley; and
  • ING.

Their job titles are a mix of data scientists and economists, as one might expect, but there are also job titles one might be less familiar with, such as algorithmic underwriter, and lead AI expert.

Most events of this type feature the participation of the big tech companies, and this one is not an exception in that regard, with representatives from IBM also scheduled to be giving talks.

IBM’s famous Watson system has become a cornerstone of most large-scale AI integrations in many business sectors, especially finance.

But according to one of the speakers scheduled – Mark Weber, of the MIT-IBM Watson AI Lab – there is more to the finance sector than the stories that make the headlines.

“Finance is too often synonymized with Wall Street, with AI applications in high-frequency trading, portfolio management, and fraud detection capturing much of our mindshare,” says Weber.

“But finance is a fundamental aspect of everyday life for everyday people, all around the world.”

Weber will present a framework for applied AI research in finance and share some of the latest joint work being done at MIT and IBM.

Another confirmed speaker is Dr Scott Baugess, who is the SEC’s deputy chief economist and deputy director of the division of economic and risk analysis.

Baugess’ work involves overseeing many tasks which are already utilizing considerable AI resources. These include risk assessment and data-driven, predictive analytics development, designed to detect fraud and misconduct in the SEC’s investigation and examination programs, specifically in the areas of corporate issuers, broker-dealers, and asset managers.

The food or fuel which drives AI is big data and not many organizations collect or generate as much data as the World Bank, which will be represented at the Re-Work event by data scientist Anton Prokopyev, who works out of the organization’s headquarters in Washington, where he is consulting on behalf of the “Innovations in Big Data Program”.

In some ways, AI is just advanced analytics based on big data, and this is the area in which Alexander De Souza, data scientist at ING, specialises.

De Souza has worked on developing neural networks for large-scale network analytics, and has been involved in the conceptualization and development of Katana, a streaming analytics platform that is introducing machine learning driven approaches to ING’s securities trading business.

Katana is said to have led to faster pricing decisions for 90 percent of trades and cut trading costs by 25 percent.

It’s been fairly widely reported that AI has already brought about profound changes in financial sector, with many people arguing that such things “robo-advisors” could replace brokers, thereby leading to greater efficiencies and higher profits.

Some say that we are just at the beginning of a trend which will continue to radically overhaul the way the financial sector operates.

Numerous interesting speeches are listed as part of the Re-Work but we thought we would pick out a few that caught our attention:

  • Reinventing Auditing with Machine Learning – Andrew Clark, Capital One
  • Opportunities and Challenges of Machine Learning in Quantitative Investment and Wealth Management – Cristian Homescu, Bank of America Merrill Lynch
  • Financial Time Series Forecasting Using Recurrent Neural Networks – Jeffrey Yau, Alliance Bernstein
  • An Inverse Recommender Approach to Detecting Out-of-Pattern Behaviour – Chris Merz, Mastercard

The traditional view of advanced technologies such as robotics, automation, and artificial intelligence is that they mostly affect jobs which could be described as less cerebral – that is, manual work and so on.

The reason for this perception is probably that many people can see how industrial robotic arms and other automation systems have replaced millions of manual workers in advanced economies.

However, the power of AI is shown to actually lie more in the higher-level, cognition-oriented, office-based, professional-type jobs – those in the legal and financial sectors, to name but two.

A deeper understanding of AI is developing. One that is becoming aware that machines actually find it much more difficult to replicate human physical movement than they do copying tasks performed by humans with computers while sitting at a desk using minimal movement.

The need to update our knowledge of these facts, and how they are affecting economies and business sectors in highly specific ways, is what has given event organizations like Re-Work an important role to play.