Building Tomorrow: Explaining the AI Tech Stack
The panel discussion focuses on the applications of AI in financial services, with a particular emphasis on Generative AI (GenAI) and its impact.
Key takeaways:
- AI has become a key focus in financial services for innovation and operational efficiency. Kfir explains how BlackRock has leveraged AI for risk assessment, trading automation, and improving decision-making processes. However, he points out that AI's impact on the financial services sector, especially for quantitative models, is still evolving.
- Financial services companies are using AI tools to increase developer productivity, improve decision-making, and reduce human error in operations. Despite some current limitations, especially in applying AI to quantitative models for investments, the industry is starting to see the promise of GenAI.
- GitHub's tools, such as Copilot, are central to this AI revolution. Shelley highlights how Copilot has helped over 77,000 organizations and 1.8 million paid subscribers by enhancing coding efficiency and developer satisfaction. The platform is witnessing a significant rise in AI-related projects, especially in GenAI development, showing its growing influence in the tech space.
- AI adoption in financial services is also accompanied by challenges related to trust, regulation, and the risk of AI models making errors (e.g., "hallucinations" in GenAI). Financial institutions must balance AI's efficiency benefits with the need for regulatory compliance and accuracy, particularly in sectors like finance that deal with sensitive data and high-stakes decisions.
- The panel discusses the EU AI Act, which regulates high-risk AI applications, ensuring trust and security while promoting innovation. Shelley emphasizes the importance of understanding AI’s regulation, especially regarding open-source software, and the need to balance safety with fostering innovation.
- Both panellists agree that financial institutions must apply rigorous risk management practices to AI, similar to how traditional financial risks are managed. While AI tools like GenAI provide significant productivity benefits, they must be treated as "co-pilots" rather than fully autonomous solutions, requiring human oversight to prevent reliance on potentially inaccurate results.
- The discussion concludes with a look ahead, recognizing that AI's role in finance is still developing. As more reliable quantitative models are created, and as training data and AI trust issues are addressed, the sector is poised to unlock further value from AI applications. Financial services firms must keep pace with technological advances or risk being left behind in an increasingly competitive market.
This conversation illustrates how AI is transforming the financial sector but also underscores the importance of managing the associated risks, ensuring compliance, and maintaining trust in AI tools and models.
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Speakers:
- Kfir Godrich, Chief Innovation Officer, BlackRock
- Shelley McKinley, Chief Legal Officer, GitHub
Moderator:
- Ronit Ghose, Head of Future of Finance, Citi