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widespread digitalization and may continue to do so.
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In addition, newer companies, notably fintechs, do not
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face this issue. The burden of legacy technology will
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therefore likely diminish, a process that generative AI, if
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anything, can accelerate.
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As is the case with any new technology, talent with
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expertise specifically in generative AI is in short supply
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across the economy. For now, financial services
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companies appear to be training staff rather than
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bidding to recruit from a sparse specialist pool. That
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said, the difficulty in finding AI talent is already starting
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to ebb, a process that would mirror those seen with the
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rise of cloud and other new technologies.
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More difficult to overcome may be weaknesses in
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the technology itself and regulatory hurdles to its
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rollout for certain tasks. Financial services companies
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aiming to benefit from generative AI face several
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hurdles. First, general, off-the-shelf tools are unlikely to
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adequately perform complex, specific tasks, such as
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portfolio analysis and selection. Companies will need
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to train their own models, a process that will require
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substantial time and investment.
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Once such software is complete, its output may
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be problematic. The risks of bias and lack of
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accountability in AI are well known. Finding ways to
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validate complex output from generative AI has yet to
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see success. Any new tool has to be designed to avoid
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violating other actors intellectual property (IP) rights;
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and generative AI algorithms may act unpredictably
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even illegallyespecially when interacting with other
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ones. Finally, so-called hallucinations, or confident
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wrong answers, are a worry with any use of generative
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AI. These risks mean that financial services companies
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must be cautious in how they deploy generative AI.
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Financial regulators are certainly wary about how
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these tools may be used. Companies are hoping
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for guidance, but this will take time. Authorities
|
acknowledge that they need to study the implications
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of generative AI more, and historically they have rarely
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approved tools before rollout. Meanwhile, the possible
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benefits of any extensive use of generative AI need to
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be weighed against regulatory dangers.
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Adoption of generative AI is growing in the financial
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services sector, but it is so far limited to automation of
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low-value activities where its use can be monitored by
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humans or would not pose unacceptable risks.
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6
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MIT Technology Review Insights
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02
|
02
|
T
|
o much of the public, the release of ChatGPT in
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late 2022 was the first shot in a new
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technological revolution. Since then, interest in
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generative AI has soared. For example, Google
|
searches for the term have risen dramatically
|
in the past year (see Figure 1).
|
With this interest has come rapid adoption by users
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across societies and economies. International Monetary
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Fund (IMF) research shows that uptake of ChatGPT
|
alonejust the most prominent of many generative AI
|
toolshas been extremely rapid even by the standards
|
of popular technology adoption (see Figure 2).4
|
The promise of
|
generative AI
|
We tend to overestimate
|
the impact of any new
|
technology in the short
|
run and underestimate it
|
in the long run.
|
Chia Hock Lai, Co-Founder, Global Fintech
|
Institute
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Figure 1: The internet discovers a new interest
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Searches for the term generative AI by Google users have surged since late 2022, reflecting rapidly growing
|
interest in the technology.
|
Note: Interest over time: A value of 100 is the peak popularity for the term. A value of 50 means that the term is half as popular.
|
Source: Compiled by MIT Technology Review Insights, based on data from Google Trends, 2023.
|
100
|
75
|
50
|
25
|
0
|
Oct. 30, 2022
|
March 5, 2023
|
July 9, 2023
|
Oct. 15-21, 2023
|
Generative AI 80
|
Interest over time
|
7
|
MIT Technology Review Insights
|
As with every new technology, a degree of excessive
|
expectationand fearis inevitably driving the
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discussion. Chia Hock Lai, co-founder of the Global
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Fintech Institute, says he sees a lot of hype now: We
|
tend to overestimate the impact of any new technology
|
in the short run and underestimate it in the long run.
|
Time for a more measured assessment
|
Indeed, Gartner reported in August 2023 that
|
generative AI had peaked in its emerging technologies
|
hype cycle, after which it would likely take two to five
|
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