Introducing Artificial Intelligence

Welcome

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 About me

Niels Pedersen
Author, university
lecturer & public
speaker.

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 A or B: Which one is real?

A B
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 Q: How do you know this is a cat?

HINT: Artificial Intelligence is pattern recognition.

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 Seminar objectives:

AI: what is it + how does it work?

ChatGPT: how is it evolving?
AI opportunities in financial services.
AI risks going forward.

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 The Turing Test
Can it do task to same standard as human so that
result appears no different?
We can view AI as a spectrum - Narrow vs. Broad(er)

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 ‘Big Data’ vs ‘ML’ vs ‘AI’
Big Data

All use large amounts of ML

data to make decisions.
Difference is a matter of
complexity and autonomy. AI

Line between ‘ML’ and ‘AI’

is more blurred. B

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 Machine Learning Cycle

COLLECT NEW
DATA SAMPLE DATA

INFORM DECISION
TRAINING
MAKING RULES

VERIFY DECISION
TESTING LIVE DEPLOYMENT
MAKING RULES

ML uses benefit of hindsight to calibrate decision making rules!

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 What is ChatGPT?

Chat Generative Pre-trained Transformer → ChatGPT.

Trained on data from internet (e.g. blogs, wikipedia…).
‘Expert’ moderators provide feedback to improve decision-
making rules.
Crowd-sourced calibration: + 100m users rate quality of
output.
v.1 released in 2018, now in v. 4, released in 2023.

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 Complete the sentence:

THE CAT IS : ‘_____’

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 Natural Language Processing (‘NLP’)

NLP helps computers process text and voice-based content.

Supports autocorrect, search engines, chatbots, and voice-
based digital assistants.
NLP matches user input to a library of words and sentence
structures.
This is done on a probabilistic (i.e. ‘best match’) basis using
ML.
Responses are also chosen on a best-match basis using ML.
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 What can language-based models do?

Write
computer
code Write Translation
Tell jokes
music

Generate
images Suggest
Generate recipes Write
films essays

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 AI in financial services:

PROS (+) CONS (-)

Automation of low value tasks Job losses

More efficient customer Lower customer
journey loyalty/engagement
Bias
Better decisions
Unintended consequences
Scientific advancement

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 AI issues

AI is only as good as the underlying data!

World is dynamic, so AI needs to be re-calibrated periodically
to prevent ‘model drift’.
Required oversight/review depends on risk of decisions.
Some algorithms are opaque and complex, so hard to audit.
AI doesn’t think, it just optimizes its decision-making.

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The end

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