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 centre 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 recognising patterns in financial data, calculating risk sensitivities or finding the optimal execution for a trade – when it comes to

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