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ACM Opinion

Be Wary of Trusting Algorithms in Volatile Markets

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Illustration of a data landscape with financial numbers.

We are seeing some of the risks of relying on increasingly complex algorithms.

Credit: cherezoff/Shutterstock

Things that might seem miraculous, such as spotting tumors in an MRI image or identifying objects in a picture, are easier for machines since they rely on a static data set. Give a machine enough images of tumors and it will learn to identify them in other images.

However, when applied to dynamic markets, algorithms suffer the same challenges as humans, best described by the warning in every investment prospectus that "past performance does not indicate future results."

As your organization considers and deploys algorithms, you should strive to educate your peers on their capabilities and limitations.

From TechRepublic
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