Large Language Models Like ChatGPT Will Perform Better Than Human Financial Analysts In The Future, New Study Proves

The fear of AI taking over the world and superseding humans is no longer just a fear but could soon become a reality. We’re already seeing it take over the tech world at a pace that’s faster than what many had expected.

Now, research experts from a leading Chicago University are talking about how Large Language Models including the likes of OpenAI’s ChatGPT could be capable of carrying out financial analysis with greater accuracy than their human rivals. And there might be some cases where they can overtake them.

The latest findings were published in new research that speaks about how the future has a lot in store for LLMs and their greatness linked to the world of finance.

In this particular study, it was so interesting to see how the greatness of GPT-4 was tested on an analysis basis of financial statements which could predict findings linked to future earnings and growth of a company.

While not a lot of narratives were spoken about in detail, the Large Language Model was out to outperform a long list of financial experts in terms of making reliable predictions and changes.

The authors concluded how large language models display a huge advantage over humans in certain scenarios when the analyst might be facing a dilemma or some sort of struggle. Moreover, it was also noted in the study how predictions of these LLMs were on the same level as the performance linked to an ML model that didn’t get the best training.

The group added how large language models were able to produce some very useful insights regarding a certain firm’s performance in the future. Moreover, such trading strategies were all dependent on the tool’s predictions which tend to reveal a bigger Sharpe ratio than those coming out from other similar models.

As per the researchers in this study, large language models are in an advantageous position due to the great knowledge that they have as well as the chance to swiftly recognize business models and concepts as well as different patterns taking center stage.

These are all necessary when you have to make a big decision, even when there isn’t a lot of conclusive data available, which is where humans tend to struggle.

Does this mean humans could soon be replaced as financial analysts and AI models would be seen taking charge? Well, the future has a lot in store and we can only make certain predictions based on research. But they don’t need to make humans in this field extinct. You can see it more as the most useful tool that assists humans in making better and more sensibly informed decisions. With time, it can even cause a huge change in terms of how a financial expects things and works in the future, and what can be better than that, right?

Large language models outperform human experts in financial predictions, offering valuable insights for trading strategies.
Image: DIW-Aigen

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