When it comes to investing, who would you trust, a blindfolded monkey, or AI?
Published in
3 min readJun 8, 2024
At the same time that research is beginning to emerge pointing to how AI is disrupting the financial analysis industry, apparently outperforming the so-called experts (what’s come to be known as the blindfolded monkey test), US Treasury Secretary Janet Yellen issues warnings about the same issue at a conference in Washington.
Yellen’s warnings, delivered during a conference on AI and financial stability before the Financial Stability Oversight Council and the Brookings Institution, have to do with several factors and attributes of AI algorithms:
- Complexity and Opacity: AI models can be highly complex and non-transparent, making it difficult for their users and the markets to understand and manage them.
- Inadequate risk management: we still lack sufficient conceptual, legal and liability frameworks to address the potential risks associated with applying AI to financial markets, as well as the responsibilities incurred by each party.
- Dependence on uniform models: organizations could become dependent for their decision-making on the same models trained on the same data, creating systemic risks derived from widespread actions inspired or coordinated by these similar analyses.
- Concentration risk: AI models and the data…