AI transforms various sectors, improve worlds economy- IMF director
By Nana Musa
Ms Gita Gopinath, the First Deputy Managing Director of the International Monetary Fund (IMF), says that Artificial Intelligence (AI) has transformed various sectors, as well as security markets.
Gopinath, however, cautioned against inherent risks.
She said this on Monday, during the second IMF-International Organisation of Securities Commissions (IOSCO) conference discussions on key trends in AI and Exchange Traded Funds (ETFs).
“Focusing on the implications for financial stability, recent generative AI and related breakthroughs have the potential to dramatically change capital markets.
“Functioning through AI–assisted process automation and analysis of complex unstructured data as well as through the greater and more powerful use of algorithmic trading, novel trading and investment strategies.
“In addition, on one hand, generative AI can enhance market analysis, risk assessment, and customer engagement through sophisticated simulations and data generation.”
According to her, generative AI also raises concerns about financial stability, data integrity, potential misuse for market manipulation, and the ethical implications of AI-generated content.
The Secretary-General of IOSCO, Mr Rodrigo Buenaventura, said that the use of AI was common in financial institutions.
“Let’s just separate between traditional AI and generative AI, the report that was published last month shows that there has been more use of AI and machine learning in financial institutions.
“More automation for detection of anti-money laundering issues, as well as for simple analysis. So, we see the use of AI a lot more. But what else has changed?
“So you can see that some of the AIs are also starting to use large language models in the area of customer-facing operations, in terms of chatbots, and also in risk management functions.
“So basically, ChatGPT or large language models have changed a lot of the way humans interact with AI. Its very easy to use.”
He said this was where some of the risks could occur, adding that it gives us a false sense of security because its so easy to use.
Buenaventura said at the same time, we forget that there’s a lot of complex modeling and data that goes behind it.
He said that with large language models, all of us would have heard that the hallucination risk was one key factor that was associated with AI or generative AI.
Buenaventura said that experts should ensure that AI was not used against the market or to the disadvantage of the main purpose.
The Assistant Managing Director of the Capital Markets Group, Mr Lim Lee, said that AI was very easy to use but also creates risks.
He said that the market manipulation could also become very common with AI in terms of resilience and concentration of risks.
“We see the use of modelling, specialised models to make it look more efficient and less costly.
“About 75 per cent of institutions use AI. However, there has been more consciousness in using AI directly because the people are now more careful,” Lee said.(NAN)(www.nannews.ng)
Edited by Ese E. Eniola Williams
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