The Future of AI in Finance: Embracing Uncertainty

The Nasdaq CEO and Chair, Adena Friedman, suggested that finance institutions should use algorithms to tackle financial crime. However, the potential adoption of unexplainable AI technology raises concerns for some. Regulations require a full understanding of any model used by a firm, so if anything goes amiss, the company cannot ignore its responsibility by blaming the computer. Nasdaq’s CEO is engaged in an interesting thought exercise, asking regulators to consider what the next generation of artificial intelligence could do to make it more effective. Friedman argues that, although not entirely explainable, AI could still be used appropriately and legally with solid guardrails in place. Despite the benefits in some scenarios, others caution against using AI technology in financial markets without fully understanding its capabilities.