Forbes Money Banking & Insurance Find Your Moneyball: Using AI To Uncover Hidden Opportunities And Advantages Chris Perry Contributor Opinions expressed by Forbes Contributors are their own. I explain the impact of new financial technologies on our markets. Following Jun 7, 2023, 11:55am EDT | Press play to listen to this article! Got it! Share to
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Twitter Share to Linkedin Data helped the Oakland A's build a great team at a low price. Soon, AI will do the same for other ... [+] industries. Adobe Stock In the movie “Moneyball,” Oakland A’s General Manager Billy Bean uses an innovative strategy called “sabermetrics” to catapult his underachieving
baseball team to success. Bean is introduced to sabermetrics by Peter Brand (played in the film by Jonah Hill), an assistant who has mastered a series of calculations that allow him to identify players other teams are undervaluing. Brand’s system enables the low-budget A’s to assemble an optimized lineup that goes on a record-breaking winning streak. In the future, every company will have a chance at a Moneyball story. But instead of coming from a brilliant analyst like Peter Brand, these opportunities will be created by artificial intelligence. Companies are already taking advantage of sabermetric-like processes powered by AI. Volkswagen is using
Artificial intelligence to design components for its electric vehicles that weigh much less than traditional parts. Using an AI software-powered process called generative design, the company has cut the weight of its wheels by 18%, saving 20 pounds, while also eliminating pounds through redesigns of its steering wheel, side mirrors and other parts. The lower weight will enable VW to extend the range of its EVs while keeping prices affordable — a major advance for the industry, and a potentially huge advantage for VW. Optimizing Performance AI is also helping to optimize performance in the corporate bond market. In this over-the-counter market, there is no central repository of bids and offers for corporate bonds. Instead, dealers have used a manual and inefficient process, working the phones in search of buyers and sellers for their clients’ bonds. Executing trades has become even more difficult since the global financial crisis, due to regulations that make big banks less willing to fully underwrite issues and provide “liquidity” to help get trades done. New AI-powered platforms like LTX scour the market to identify dealers and investors likely to be interested in buying or selling a particular corporate bond offering. LTX’s newest application, BondGPT , is a large language model (LLM) chat function powered by OpenAI GPT-4 that allows users to ask questions and identify corporate bonds on the LTX trading platform based upon the user’s criteria. By using machine learning tools to generate this information in real time, these systems help investors and dealers source bonds and complete trades more quickly and at the best possible price. In so doing, they make the corporate bond market overall more liquid and efficient. I believe AI will create these Moneyball opportunities in every industry and every profession. As AI models become increasingly powerful, it will be up to each of us to find ways to use the technology to create efficiencies and advantages in our own jobs and businesses. MORE FOR YOU
Lionel Messi Agrees To Join Inter Miami: Reports At The Bleeding Edge Of Ukraine’s Counteroffensive, The Ukrainian Marine Corps Switches Up Its Tactics Twitch Hit With Backlash And Boycott Threats—As Streamers Say New Rules Threaten Their Income Saving Time Some of these applications will be universal. AI can speed up or completely automate everyday tasks. Consider something as basic as a Sudoku puzzle. For most of us, solving a difficult Sudoku can take 10 minutes or more. Today, anyone can download AI applications that solve even the toughest puzzles instantly. There are countless ways these capabilities can be applied in business. As just one example, anyone tasked with writing a document or report should already be asking ChatGPT or some other AI platform to compose a first draft. Although that initial version might not be perfect, utilizing AI at the outset can save hours in research and organization. Preparing for an important sales meeting or
Job interview? Have an AI program research the individual you’re scheduled to meet and prepare a list of personalized questions and talking points. Other AI applications will be specific to your field or job. For example, financial advisors spend hours trying to match clients with the most suitable investment products. AI tools can complete that task in an instant, freeing up time the advisor can use to have real conversations with clients. In this case, the AI recommendations might even offer some advantages over selections made by the advisor. By asking the AI to recommend only products that are most appropriate for a specific client, the advisor can ensure she is adhering to her fiduciary responsibilities, and clients can be confident that the recommendations are in their best interests. These examples are just the tip of the iceberg. In the future, each of us will be partnered with a brilliant analyst completely devoted to solving problems and finding better ways to do our jobs and run our businesses. These AI programs might not be as entertaining as Jonah Hill, but if applied correctly, they might uncover the Moneyball opportunities that propel you and your organization to success. Follow me on Twitter or LinkedIn . Chris Perry Editorial Standards Print Reprints & Permissions