When it comes to investing, who would you trust, a blindfolded monkey, or AI?

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:

1. 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.
2. 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.
3. 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.
4. Concentration risk: AI models and the data…