Wall Street's ChatGPT Nightmare Is Over Before It Starts as Banks Crack Down
“Technology continues to improve, and one of these days we will be at a point where the machines will out-think people,” said Larry Tabb, an analyst at Bloomberg Intelligence.
But he said regulatory concerns, including Securities and Exchange Commission rules, will have the final word.
“When the SEC knocks on your door and asks why did you execute that transaction, you have to have a better answer than, ‘Well the machine told me to,’” Tabb said. “You can gather insights and analysis from AI and then program your computers, but black-box trading models are generally not sanctioned on Wall Street because you don’t know why the trading decision was made.”
Nothing Afoot
The head of trading at one of the world’s largest banks — speaking, like many others for this story, on the condition of anonymity — outlined some fairly obvious limitations for using the new AI to replace humans. For starters, in areas like stock trading, they’ve already been replaced.
While it’s possible that ChatGPT and rival platforms may help banks realize their longtime goal of automating other areas such as fixed income markets, the executive said there’s no project afoot to use them.
Perhaps someday.
The world has been buzzing over OpenIA’s ChatGPT since its public unveiling late last year. The technology, using word prediction, can formulate essays, letters, lyrics and poetry practically instantaneously. And because the results are probabilistic, it gradually gets smarter and more nuanced.
But for now, one problem for Wall Street is that ChatGPT struggles with math.
The system scored slightly below 60% when an associate professor at Arizona State University fed it 1,000 mathematical word problems in early January. An update to the model later that month aimed at improving that.
Corporate earnings also seem to bedevil chatbots. Microsoft Corp.’s Bing chat, a cousin of ChatGPT, spit out incorrect earnings data in a demonstration at Microsoft’s campus when the company unveiled the new product earlier this month.