Global Association of Risk Professionals (GARP)’s Post

New in #RiskIntelligence: Financial institutions are clearly benefiting from machine learning and generative AI, but a recent academic research paper shed some light on a new danger: the technology’s potentially problematic ability to bilaterally link finance with real economic decisions. https://lnkd.in/eAG8b8Nz #AI #generativeAI #riskmanagement #financialrisk

Financial institutions are clearly benefiting from machine learning and generative AI, but a recent academic research paper shed some light on a new danger: the technology’s potentially problematic ability to bilaterally link finance with real economic decisions. Read "Evolving AI: Threats and Opportunities" by Aaron Brown in #RiskIntelligence now. https://lnkd.in/eAG8b8Nz #AI #riskmanagement #financialrisk

Evolving AI: Threats and Opportunities Financial institutions are clearly benefiting from machine learning and generative AI, but a recent academic research paper shed some light on a new danger: the technology’s potentially problematic ability to bilaterally link finance with real economic decisions.

Check out this great piece from McKinsey which explores the way corporate and investment banks are already using AI and generative AI technology, and where they could be doing more: https://okt.to/SKEgOH #AI #GenerativeAI #InvestmentBanking #CaptialMarkets

The relentless advancement of AI has consumed our thoughts and conversations here at Singletrack. We're exploring ways to harness this powerful tool and infuse it into our product. McKinsey has written as piece to uncover the ways in which corporate and investment banks are diving headfirst into the realm of AI and generative AI technology. https://okt.to/IJxLGz #AI #GenerativeAI #InvestmentBanking #CaptialMarkets

New Post: IMF Publications’ Report Highlights Growing Risks of Generative AI in Financial Sector - https://lnkd.in/emwm3N3f artificial intelligence (AI) continues its expansion into the finance sector, a new report published on the International Monetary Fund (IMF) Publications web portal cautions about risks associated with the latest AI capabilities in the financial world. The Rise of Thinking Machines: Report Warns of Risks From Generative AI in Finance The report, authored by […]

🔍 Bank of England (#BoE): Navigating the Risks of #AI in Finance: Insights from the EU #AI Act 🔍 💼 Jonathan Hall, Financial Policy Committee (#FPC) External Member, sheds light on how AI developments could influence financial stability in his recent speech published on 07-May-2024. 📈 In his address, Mr. Hall delves into the potential risks posed by firms employing #AI models, particularly focusing on deep learning. He explores the concept of "deep trading agents" and their implications for market stability, emphasizing the need for collaboration among regulators, market players, and #AI safety experts. Key takeaways: 1️⃣ Training, monitoring, and control: Rigorous training, testing, and tight risk management are crucial for deep trading algorithms to mitigate potential risks. 2️⃣ Alignment with regulations: Continuous adaptation to ensure compliance with evolving regulations is essential for market integrity. 3️⃣ Stress testing: Novel stress scenarios and testing methods are required to understand and manage the behaviour of deep trading algorithms effectively. While acknowledging the transformative potential of #AI, Mr. Hall underscores the importance of vigilance and collaborative efforts in navigating its impact on financial markets. 🚀 As firms integrate #AI models into financial operations, potential risks to financial stability emerge. The EU #AI Act sheds light on these systemic risks, offering a framework to understand their broader economic impact. 📊 Systemic Risks from High-Impact Capabilities: #AI models can influence financial markets significantly, executing trades at unprecedented speeds, potentially causing rapid market movements during volatile periods. ⚠️ Misuse and Reliability Concerns: Unreliable #AI models can spread false financial information, undermining investor confidence and disrupting markets. 🔐 Cybersecurity Vulnerabilities: #AI systems must ensure robust cybersecurity to prevent financial fraud and protect sensitive data. 🌍 Impact on the Internal Market: #AI models used by over 10,000 businesses can homogenize risk-taking behaviours, amplifying systemic risks. 🛡️ Regulatory and Compliance Risks: Firms must navigate evolving regulations to avoid legal penalties and operational disruptions. 🔗 Chain Reactions from Model Failures: The interconnectedness of financial institutions means a single #AI model failure could trigger sector-wide volatility. Understanding and mitigating these risks is crucial for maintaining financial stability in our increasingly #AI-driven world. Let's stay informed and proactive! 🌐Read here > https://lnkd.in/dGQ-q5KA 💡 #AI #Finance #FinancialStability #DeepLearning #Regulation #Banking #BoE #FPC #Collaboration

Wholesale banks possess extensive knowledge in traditional AI, and this investment is proving beneficial once more as generative AI gains traction. Read more: https://lnkd.in/eKgC655J #GenerativeAI #AI

This human hubris is poised to get a frightening new tool in the form of artificial intelligence (AI). Its capacity to sift through vast volumes of data and offer highly targeted recommendations will instill a completely unwarranted sense of confidence among consultants, social scientists (particularly economists), and other readers of tarot cards that they can finally foresee the course of the universe. #artificialintelligence #algorithms #HumanHubris #ForecastingModels #RegressionModels

The move shows the rising importance of artificial intelligence in financial services, sparked by the meteoric rise of generative AI tools that create human-like responses to queries. #ai #financialservices #banking #morganstanley #cnbc