How does AI in finance mimic human intelligence and help perform touchless activities?
Most of us agree that humans will always be needed in finance, but probably less-so and for more complex activities as AI advances. To better understand where AI can be useful, its necessary to understand how AI works and how it’s evolving. AI stores and catalogs information and experiences. Similar to human memory, and to perform activities, AI draws on logic in the form of programming — think if/then statements.
This programming is matched with algorithms or math (statistical analysis) that helps spot relationships, outliers and trends. With additional calculations, AI can make recommendations and assign a probability of success to these recommendations. And when human feedback is added to these recommendations, AI can then adjust its math to improve its recommendations and their probability of success. In some cases, the recommended actions become accurate enough to eliminate the need for humans to continue stepping in.
An example of how AI learns and adapts is a chatbot. When a chatbot is first set up, humans identify key words and phrases that are used to formulate complete questions, which in turn are used to map to a list of standard answers. In a chatbot’s early stages, non-sensical questions and answers are sometimes produced. As human feedback is incorporated, the answers become more accurate and useful. Over several iterations, the underlying technology maps and correlates corrected answers to similar keywords, questions and answers. In effect, it adapts and becomes smarter on its own.
As you can see, AI mirrors human intelligence. Technology is striving to replicate how the human brain works. As such, AI continues to get better as other technologies are incorporated, essentially better math (e.g., machine learning) and better programming (i.e., deep learning powered by neural networks — interconnected AI cells) to help come closer to replicating how the human brain works in an everchanging environment.