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Machine Learning Tools so Accessible Even Individuals Can Do It

By Tim Sloane
November 14, 2018
in Analysts Coverage, Artificial Intelligence, Emerging Payments
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AI

AI

This well researched article in Mondo Visione appears to be a reprint of the speech given by Federal Reserve Governor Lael Brainard at Fintech and the New Financial Landscape event held in Philadelphia. It discusses how machine learning tools are now so available that even individuals can spin-up an instance in the cloud and run the most sophisticated new AI models with minimal effort.  The speech then identifies the benefits AI delivers to financial services firms:

“So it is no surprise that many financial services firms are devoting so much money, attention, and time to developing and using AI approaches. Broadly, there is particular interest in at least five capabilities.8 First, firms view AI approaches as potentially having superior ability for pattern recognition, such as identifying relationships among variables that are not intuitive or not revealed by more traditional modeling. Second, firms see potential cost efficiencies where AI approaches may be able to arrive at outcomes more cheaply with no reduction in performance. Third, AI approaches might have greater accuracy in processing because of their greater automation compared to approaches that have more human input and higher “operator error.” Fourth, firms may see better predictive power with AI compared to more traditional approaches–for instance, in improving investment performance or expanding credit access. Finally, AI approaches are better than conventional approaches at accommodating very large and less-structured data sets and processing those data more efficiently and effectively. Some machine learning approaches can be “let loose” on data sets to identify patterns or develop predictions without the need to specify a functional form ex ante.

What do those capabilities mean in terms of how we bank? The Financial Stability Board highlighted four areas where AI could impact banking.9”

While Mercator has written on all of this in recent reports, the speech does a relatively deep dive into the four areas highlighted by the Financial Stability Board and is well worth reading.

Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group

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Tags: AIFederal ReserveMachine Learning

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