Gaining a Fundamental Understanding of Artificial Intelligence

Artificial intelligence is a major topic in the fintech industry. With all of the financial content that is create by corporations, traders, equity firms, exchanges, et al., artificial intelligence experts are working on solutions to leverage this data for strategic advantages.

But what exactly is Artificial Intelligence? How is it developed? Where may it be going? In this YouTube video produced by Bloomberg, journalist Ashlee Vance takes a tour of the Canadian artificial intelligence industry.

Neural Networks
Ashlee first interviews Jeff Hinton who is a professor at the University of Toronto. Jeff has worked in artificial intelligence for decades and is one of the first researchers of “Neural Network” artificial intelligence. In the 1980's Jeff developed a “deep” multi-layered neural network. This type of technology enabled Dean Pomerleau to develop a street worthy, self-driving car in the late 1980's! Technological advancements caught up to artificial intelligence theory in 2006 due to faster computer processors and internet connections. Since then artificial intelligence adoption has become omnipresent. Neural network AI is now powering speech recognition, image recognition, self-driving cars and more!

Reinforcement Learning
Ashlee later interviews Rich Sutton and discuss the concept of reinforcement learning and how it can develop artificial intelligence. Reinforcement learning rewards the system for positive outcomes and punishes the system for negative outcomes. (This is one method humans use to learn.) As the system replicates reinforcement learning over hundreds / thousands / millions of iterations, the artificial intelligence can "learn" an optimal strategy to gain positive outcomes. AI powered by reinforcement learning is the technology that Netflix uses to personalize movie recommendations for it's users. It's the AI system used to beat a world-champion GO player. Ashlee mentions that this type of AI may soon be able to read our brain waves! Ultimately, reinforcement learning AI may lead to the Singularity....

Singularity = Artificial Intelligence > Human Level Intelligence

It is clear that artificial intelligence develop and utilization is progressing at a rapid pace. It is up to finance professionals to learn how to leverage this technology to add more value within their organizations.

​What are your thoughts about AI and Fintech? How does your organization leverage AI today? How do you think AI will transform finance?  Comment below to start a discussion.