The AI Book

Preface

Artificial intelligence (AI) is changing our lives. It has never been more important to have a clear understanding of what AI is and the ramifications of its mass adoption, particularly in the financial services sector. However, the inherent complexity of the topic is often intimidating to non-specialists, and the absence of a broad-based dialogue on the topic of AI is hindering business decision-making. The AI Book explains what exactly artificial intelligence is; how is it being used in financial services; what is at stake; who are the major players; and what lies over the horizon?

AI and Deep Learning have broad ranging applications in deposits & lending, insurance, payments, investment management and capital markets. Deep learning solves the classification problem by letting the machine learn by itself. Similar technologies are used in assessing the right premiums for insurance markets and making predictions about stock market prices based on a large number of variables, which can then be used for automated trading.

Deep Learning is now used in finance to make connections between large numbers of seemingly unconnected events and variables to make predictions for fraud detection, insurance pricing and trading stock.

However, data needs to be unbiased, or otherwise the machine will learn the bias that is inherently embedded in the data. It is a known fact that many facial recognition algorithms work well with certain races but much less reliably with other races ...