GenAI too risky for collateral processes
The technology has been heralded as game-changing for other areas of finance, but its potential to hallucinate may disqualify it from sensitive settlement procedures.
Financial services firms are opting not to use generative AI in collateral management, judging the process to be too critical to allow for a greater possibility of error. This is despite many banks’ risk chiefs softening their initial hardline approaches to using the technology over the last year.
Collateral management is the process of handling assets such as cash or securities, which have been pledged to reduce risk in financial transactions. Having sufficient collateral for deals means that
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