Almost Friday! Dan DeFrancesco in NYC, and I’m feeling both grateful and disappointed that I missed out on drinking “borgs” in college.
Today, we’ve got stories on a meeting between Morgan Stanley’s CEO and the Saudi crown prince at the onset of the pandemic, how one top hedge fund is looking to team up with ChatGPT, and rich people trying to live forever.
But first, the banker robot will see you now.
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1. So about that loan…
If you’ve followed the news at all this year — and certainly this newsletter — you’ve heard about how ChatGPT, and more broadly generative AI, is set to shake up the world of finance.
(If you haven’t, here are the answers to all the questions you’re now too afraid to ask about ChatGPT.)
There are plenty of interesting and valuable use cases for ChatGPT-type tech in finance. We’ve written about Chime developing a chatbot to help engineers build new features and tools for the neobank faster, and Swedish PE giant EQT using ChatGPT “to make cyborgs” out of its dealmakers, to name a few.
But a recent report by Credit Suisse on the use cases for both ChatGPT and AI in finance caught my eye. The report, which was summarized by Insider’s Thomas Maxwell, mentions lending as one area that can benefit from the use of AI. As the report notes, the tech could be used to “verify customer information to assess the eligibility for loan applications, automate loan underwriting, assess credit risks, etc.”
This sounds like a great idea! Credit scores stink. They are outdated, often biased, and don’t give a complete picture of the potential borrower. But despite the mountain of evidence we have against using them, they’re still a key piece of peoples’ financial lives.
Infusing some cutting-edge tech into the process seems like it could fix a lot of those issues. Firms are already doing this to a degree, but it’s not a silver bullet. AI models are only as good as the data they receive, which leaves them susceptible to bias, just like humans.
They also aren’t always transparent, which is a big no-no in credit decisioning. You can’t deny someone a loan and then shrug your shoulders when they ask why.
I am sure the tech will continue to improve …read more
Source:: Business Insider