Artificial Intelligence will weaken the financial system
In the few up coming years Artificial Intelligence will going to take over the world of finance or they can also automate the investing along with other services- but it is opening doors for some difficulty in systematic weakness and introducing risks, stated in a recent report from the World Economic Forum (WEF).
The report has the view and expertise information from various interviews that are taken by famous finance leaders and according to the report it is being said that Artificial Intelligence will destabilise the industry as because they are giving permission to early adopters to outmaneuver competitors. The technology will produce such amazing products for consumers that will help them to manage their personal finance and investments.
But the report is giving hints to the potential for large scale financial institution so that they can form a machines learning based services that will be present in the cloud and it can be accessed by other institutions too.
“The best kind of machine learning form a very strong payments to network that are there in office “ said the main author of the report, Jesse McWaters, who leads the Artificial Intelligence in Financial Services Project at the World Economic Forum. “If there is lot of network in the world that are more fragile to cybersecurity risks, and it produces concentrations risks”.
In some other words, financial systems that help in machine learning and it can be accessed through with many cloud from different institutions and after this it can present nice target for hackers and just one point of failure in system.
Wall Street is adopting machine learning very fast, the technology is only center of the artificial intelligence. Firms related to finance store large data and lots of incentives so that they can innovate. Hedge funds and banks are going to hire Artificial Intelligence researchers very fast, and industry related to finance are experimenting with back- office automation is another best way to do so.
The high- frequency trading has already automated the trading and created systemic risks, as they are highlighted by many other runway trading events, or some kind of “flash crashes” in very recent years.
Andrew Lo, who is a professor at MIT’s Sloan School of Management, made a report on problems of systemic risk in the financial system, he also warned that the system will be vulnerable as they are not so complex.