By Rick Nason,
PhD, CFA
Partner, RSD Solutions Inc.
Partner, RSD Solutions Inc.
Lots of jokes
have been made about AI (Artificial Intelligence); Artificial Ignorance and
Artificial Imbecility are two that readily come to mind. AI is a tool, and a very useful tool at that
– in my opinion. However, AI does not
replace the human factor. AI does not
understand the human factor. AI cannot
(almost by definition) deal with the paradigm shifts caused by the human factor
– namely human creativity. Likewise, AI
is not so good at dealing with or predicting seemingly random human stupidity.
The point that the good risk manager remembers
is that virtually all risk is human in nature.
Humans are real. Humans are not
artificial (okay, some reality TV stars – and former reality TV stars – are
very artificial). While AI is a very
helpful risk management tool and a complement to human wisdom and intuition,
ultimately you need humans to understand and manage humans. Risk is human, and so ultimately the final
word in risk management should be human as well.
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