In recent years, artificial intelligence (AI) has made incredible strides, thanks in part to the advent of deep learning. However, there are still limitations to what traditional AI models can achieve. This is where human-in-the-loop AI comes in. Human-in-the-loop AI is a type of artificial intelligence that leverages the power of humans and machines working together. By combining the best of both worlds, human-in-the-loop AI has the potential to solve some of the most difficult problems that traditional AI models cannot.
The Benefits of Human-in-the-Loop AI
Human-in-the-loop AI has several advantages over traditional AI models. First and foremost, human-in-the-loop AI is more flexible because it can adapt to changing conditions on the fly. This week's stock market ran the gauntlet of some poor financial performance from the technology industry, as well as disappointing economic data, but without too much damage. This suggests that the market's resilience to bad news raises the possibility that the recent bottom marks the end of the current bear market. Traditional AI models are static and cannot easily adapt to changes that are so fragmented and contextual. Human-in-the-loop AI can recognise this context and price in future changes effectively.
Human-in-the-loop AI is more efficient because it can learn from humans who already have expertise in a particular domain. Chris Iggo, Chair of AXA IM quite rightly states: ‘All economic activity is a result of human behaviour’. Human-in-the-loop AI opens the door to more forward-looking market pricing. Undertones and nuances more easily explained by human behaviour are recognisable with human-in-the-loop AI. For example, the optimism across global markets this week is contingent on central banks softening the tone of their comments on interest hikes. The European Central Bank raised interest rates by 0.75%, but hinted that the pace of tightening is slowing, saying “substantial progress” has already been made toward tighter monetary policy.
Third, human-in-the-loop AI is more scalable because it can be used by organisations of all sizes. Finally, human-in-the-loop AI is more transparent because it makes it easy for humans to understand how the system works and why it makes certain decisions. For example, we have seen that bond yields have already risen significantly this year. Since the beginning of the year, 10-year bond yields in the United States, the eurozone, and the United Kingdom have all increased by nearly 250 basis points. This is primarily because markets anticipated higher policy rates. Human-in-the-loop AI can discover new market and asset dynamics, differentiate between investment strategies and provide real-time insight on what decisions are being made and why.
Human-in-the-loop AI has the potential to revolutionise the field of artificial intelligence. By leveraging the best of both humans and machines, human-in-the-loop AI can overcome some of the limitations of traditional AI models. If you're looking for an artificial intelligence platform that is more flexible, efficient, scalable, and transparent, Luumeos is the way to go.