4 ms·

As far as I know, finance is not all in. I see Goldman Sachs doing experiments, for example, but it doesn't feel like they're convinced yet.

K0balt 2y ago
Finance is basically all of the reasons not to use (generative, LLM based) AI , all in one vertical. The poster child of determinism.
- baq 2y ago
  Finance is all in on reading 10-Ks and generating summaries. If you have decisions in mind, I’ll be referring to IBM 1979 slide until an HR LLM fires me.
  - guerrilla 2y ago
    That's not finance, that's just a generic application, and I think it's a terrible idea that won't last anyway.
- eru 2y ago
  Could you please explain? Finance is a big industry, and they are doing lots of different things.
  - oblio 2y ago
    Nobody wants to lose money (savings) or go bankrupt because of hallucinations.
    - eru 2y ago
      That's one small part of finance. (And essentially solved mechanically with index funds.) There's a lot more to finance outside of that.
      - oblio 2y ago
        At the end of the day, the hard limit in finance is defaulting. Everything outside that is financial poetry (or engineering :-p). I know every segment of finance loves to pretend that's not the case, because their jobs (and high salaries) frequently rely on that not being true (see the subprime mortgage crisis).
        eru 2y ago
        > At the end of the day, the hard limit in finance is defaulting. Everything outside that is financial poetry (or engineering :-p). You are forgetting all about regulations and taxation (and how to work with / around them). And how to cleverly read documents, and exploit loop holes in contracts. There's so much more to finance. (And for eg stocks or commodities, there's not even any notion of defaulting. Defaulting only really makes sense when you have fixed obligations. 'Fixed income' is only one part of finance.) > (see the subprime mortgage crisis) That's actually a more nuanced topic than you think. See eg https://kevinerdmann.substack.com/p/subprime-bank-runs-and-the-global https://kevinerdmann.substack.com/p/subprime-bank-runs-and-t... and other posts by Kevin Erdmann on the topic.
  - K0balt 2y ago
    Sure, there’s lots of room for LLMs in helping to do clerical work, HR, that kind of thing. I was actually thinking of the direct management of funds and investments. So yeah, like probably all businesses, the ancillary functions can probably improve productivity using Generative AI with a minimal hit to quality.
    - eru 2y ago
      You are right about the clerical work, but even pure finance is a lot more than 'direct management of funds and investments'. Have a look at Matt Levine's Money Stuff newsletter for a taste. And I'm not quite sure why you mention determinism in the grandfather comment? Finance people have been using Monte Carlo simulations for ages. (And removing non-determinism from LLMs by fixing the seed of any pseudo-random number generator used wouldn't really change anything, would it?)

K0balt 2y ago

Finance is basically all of the reasons not to use (generative, LLM based) AI , all in one vertical. The poster child of determinism.

baq 2y ago
Finance is all in on reading 10-Ks and generating summaries. If you have decisions in mind, I’ll be referring to IBM 1979 slide until an HR LLM fires me.
- guerrilla 2y ago
  That's not finance, that's just a generic application, and I think it's a terrible idea that won't last anyway.
eru 2y ago
Could you please explain? Finance is a big industry, and they are doing lots of different things.
- oblio 2y ago
  Nobody wants to lose money (savings) or go bankrupt because of hallucinations.
  - eru 2y ago
    That's one small part of finance. (And essentially solved mechanically with index funds.) There's a lot more to finance outside of that.
    - oblio 2y ago
      At the end of the day, the hard limit in finance is defaulting. Everything outside that is financial poetry (or engineering :-p). I know every segment of finance loves to pretend that's not the case, because their jobs (and high salaries) frequently rely on that not being true (see the subprime mortgage crisis).
      - eru 2y ago
        > At the end of the day, the hard limit in finance is defaulting. Everything outside that is financial poetry (or engineering :-p). You are forgetting all about regulations and taxation (and how to work with / around them). And how to cleverly read documents, and exploit loop holes in contracts. There's so much more to finance. (And for eg stocks or commodities, there's not even any notion of defaulting. Defaulting only really makes sense when you have fixed obligations. 'Fixed income' is only one part of finance.) > (see the subprime mortgage crisis) That's actually a more nuanced topic than you think. See eg https://kevinerdmann.substack.com/p/subprime-bank-runs-and-the-global https://kevinerdmann.substack.com/p/subprime-bank-runs-and-t... and other posts by Kevin Erdmann on the topic.
- K0balt 2y ago
  Sure, there’s lots of room for LLMs in helping to do clerical work, HR, that kind of thing. I was actually thinking of the direct management of funds and investments. So yeah, like probably all businesses, the ancillary functions can probably improve productivity using Generative AI with a minimal hit to quality.
  - eru 2y ago
    You are right about the clerical work, but even pure finance is a lot more than 'direct management of funds and investments'. Have a look at Matt Levine's Money Stuff newsletter for a taste. And I'm not quite sure why you mention determinism in the grandfather comment? Finance people have been using Monte Carlo simulations for ages. (And removing non-determinism from LLMs by fixing the seed of any pseudo-random number generator used wouldn't really change anything, would it?)