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The Truth Behind Artificial Intelligence: Illustrated by Designing an Investment Advice Solution

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Abstract

Artificial intelligence can be considered one of those technologies, like 5G, 3D printing, and virtual reality, that can disrupt the business world. While AI has the potential to solve meaningful business problems, implementing it in a way that creates value is challenging. Unfortunately, many AI proponents lack the necessary computer science and mathematics machine learning skills required for developing AI systems that pass the Turing test. This paper presents an assessment of the characteristics of AI, allowing the reader to understand what specific business problems it can solve, and describes how an AI-supported investment advice solution for wealthy private clients can successfully deliver value. By reviewing the lessons learned, I conclude that the future of AI is bright if the focus is put on applying it to those challenges that it is best suited to solve.

Suggested Citation

  • Diderich, Claude, 2023. "The Truth Behind Artificial Intelligence: Illustrated by Designing an Investment Advice Solution," Journal of Financial Transformation, Capco Institute, vol. 58, pages 116-125.
    • Handle: RePEc:ris:jofitr:1706
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    References listed on IDEAS

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    1. Sebastian Lapuschkin & Stephan Wäldchen & Alexander Binder & Grégoire Montavon & Wojciech Samek & Klaus-Robert Müller, 2019. "Unmasking Clever Hans predictors and assessing what machines really learn," Nature Communications, Nature, vol. 10(1), pages 1-8, December.
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    More about this item

    Keywords

    AI; Artificial Intelligence; Machine Learning; Investment; Complexity; Statistics; Big Data; Correlation; Algorithm;
    All these keywords.

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • M15 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - IT Management
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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