When Reddit takes control of the world's financial infrastructure.
The banking industry is facing a rapid evolution in the realm of Model Risk Management, as traditional methods struggle to handle non-deterministic, black-box, and highly biased AI systems. This shift was one of the key topics discussed at the recent BIS Innovation Summit held in Basel, Switzerland.
One of the concerns raised was the potential influence of crypto Reddit bros on financial institutions. The summit also delved into the issue of AI-generated content, particularly on platforms like Reddit, and the concern about its impact on the "enshittification of the internet."
Dr Lewis Z. Liu, co-founder and CEO of Eigen Technologies, was among the attendees at the summit. Another significant discussion point was the need to preserve human contributions in AI-generated content. Approaches suggested included clearly signaling human, AI, or hybrid-generated text, ensuring next-generation models train on more human versus AI content, and developing deeper personalization based on professional context.
The summit also highlighted the democratization of AI, thanks to Big Tech pouring hundreds of billions into technology that is now accessible for free. This has led to a surge in AI-generated content, with 70% of new content on the internet being AI-generated. This excessive reliance on AI, particularly in highly technical organizations like central banks, could potentially have significant implications.
The IP and copyright conversation has been won, more or less, by Big Tech and AI model companies. However, the recent $1.5bn settlement reached by Anthropic with authors for content rights underscores the inherent value of human-written knowledge these authors represent.
The first level of AI safety concerns discussed at the summit involved ensuring AI tools don't mistake payments, preventing bias in credit decisions, and blocking malicious prompts. Another concern raised was AI security, with its new challenges due to AI agents having vastly larger attack surfaces and exponentially more attack vectors.
The more policymakers nurture entrepreneurial environments, the more we can level the playing field. The need to leverage LLMs' immense power while preserving individual human contributions was also discussed. The more entrepreneurs innovate on next-generation technology built partly on LLMs, offering broader choice and more targeted solutions, the better.
The BIS, or Bank for International Settlements, is a central bank for central banks, owned by the world's major central banks. The summit provided a platform for these key players to discuss and strategize on the future of AI in the financial sector.
In conclusion, the BIS Innovation Summit served as a valuable forum for discussing the challenges and opportunities presented by AI in the banking sector. As AI continues to evolve, it is crucial for policymakers, industry leaders, and innovators to work together to ensure a balanced and safe integration of AI in our financial systems.
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