WEF warns: AI could destabilize the financial system
Artificial intelligence will definitely change the financial world in the near future, automating investment and other services - but it can also make the imbalance in systematic weaknesses and risks, according to the World Economic Forum (WEF).
The report, made on the basis of interviews with dozens of leading financial experts and leaders of the industry, it is concluded that artificial intelligence will destroy the industry, allowing pioneers to gain a competitive advantage. This also means that the technology will lead to the emergence of a more consumer-friendly products such as sophisticated tools for managing personal finances and investments.
What will happen to banks in the future?
But the most important thing is that the report pointed to the possibility of large financial institutions to create services based on machine learning that are found in the cloud and accessed by other institutions.
"Dynamics of machine learning creates a strong incentive for the unification of back office", says the report's lead author Jesse MakUoters. "A networked world more vulnerable to cyber security risks and creates a risk of concentration."
In other words, financial systems that include machine learning and are available through the cloud are many agencies can be a tasty target for hackers and a single point of system failure.
Wall Street already rapidly developing machine learning - the technology that is at the heart of artificial intelligence boom. At financial companies have a lot of data and a lot of incentive to innovate. Hedge funds and banks are hiring experts in the field of AI as soon as possible, and the financial industry is experimenting with full automation of back-office. Automation of high-frequency trading has always created systemic risks. The whole system can be much more vulnerable because of their complexity.