Bot’s job? Quants question AI’s model validation powers

But supervisors cautiously welcome next-gen model risk management

Can bots police bots? It’s a conundrum at the center of many a sci-fi thriller. But now the real-world question is whether bank bots can validate their own models—or perform the crucial job of ensuring risk management models are fit for purpose. Some quants don’t think they can.

While banks already deploy artificial intelligence (AI) for many tasks—such as recognizing patterns in financial data, calculating risk sensitivities or finding the optimal execution for a trade—when it comes to model

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The IMD Wrap: Will banks spend more on AI than on market data?

As spend on generative AI tools exceeds previous expectations, Max showcases one new tool harnessing AI to help risk and portfolio managers better understand data about their investments—while leaving them always in control of any resulting decisions.

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