Opinion | 3 spectres haunting global finance must be seen before it’s too late
The financial industry’s use of emerging technologies could lead to cascading crises if regulators don’t act fast to enforce transparency
Large-language models generally rely on similar data, signals and optimisation logic. There’s a collusion effect. Feedback loops heighten the risks of synchronised and repetitive errors at frenzied speeds.
Another concern is position bias, a phenomenon whereby AI overemphasises information at the beginning and end of a text, which Massachusetts Institute of Technology researchers recently uncovered. Data can be invariably conflicting, error-ridden, imprecise, cluttered and ambiguous. Even if gaps are filled, applicability is limited since each event’s causes and complexities are unique.
“AI’s ability to respond swiftly and decisively – combined with its opaque decision-making process, collusion with other engines, and the propensity for hallucination – is at the core of the stability risks arising from it,” Danielsson writes. He warns that “AI crises will be fast and vicious”.