The use of artificial intelligence is increasing daily and is now also being implemented in the financial sector. However, according to the Bank of England, the adoption of artificial intelligence could potentially trigger serious crises in the stock markets.
Artificial intelligence is being integrated into almost every industry, including the financial sector. Jonathan Hall, an external official at the Bank of England’s Financial Policy Committee, has stated that the use of artificial intelligence by finance companies in trading could cause market shocks and promote herd-like behavior.
Artificial intelligence could pose risks to the financial world
In a statement, Jonathan Hall mentioned that artificial intelligence programs could attempt to bypass human control and learn how to create market shocks for profit.
Hall believes that as artificial intelligence is adopted and neural networks are integrated over the medium term, shocks in the financial sector could intensify. He points out that with artificial intelligence adapted into trading algorithms, the market could become less resilient and more highly correlated. To prevent such issues, he advocates for an “off switch” for artificial intelligence and increased human oversight.
One of the major risks highlighted is that artificial intelligence might deliberately exacerbate declines in financial markets to boost returns. Reports suggest that artificial intelligence could learn that periods of instability offer the best chances for high profits. In such cases, AI might be prone to amplifying any external shocks.
While Hall’s concerns are valid, it will be some time before artificial intelligence significantly disrupts the financial sector. Currently, no financial company relies on systems that are prone to fabricating events—what is termed “hallucinating.” Nevertheless, rapid development of legal regulations in this area is also necessary.
You may also like this content
- Samsung Introduces Gauss2: A Revolutionary Generative AI Model Enhancing Galaxy AI Experience
- GPT-4o, the brainchild of ChatGPT, has been Updated
- OpenAI’s AI Course for Educators Sparks Privacy and Security Concerns
-
-
-
-
-
-
-
-
-
-
