AI’S POTENTIAL AND PERILS FOR FINANCE: STEVE COHEN OF BASIS TECHNOLOGY
AI’S POTENTIAL AND PERILS FOR FINANCE: STEVE COHEN OF BASIS TECHNOLOGY
February 19, 2019
I had a fascinating conversation in Boston this winter with Steve Cohen, who is Cofounder, EVP, and COO of Basis Technology. Basis is a world-leading innovator in text analytics and the branch of artificial intelligence known as natural language processing. Over the last two decades. they have built a suite of tools that can analyze information produced by people in text form, in virtually any language, and distill patterns that reveal meaning and connections.
In our talk, Steve explains how AI already shapes our daily lives, starting with the seemingly simple example of Amazon’s voice assistant, Alexa. AI can gather data of massive scale and complexity, beyond what any human brain can assimilate. It can analyze that information and then, without guidance from a human expert, can learn on its own as it goes, getting more and more “smart.”
Basis focuses heavily on intelligence issues, serving a mix of government and commercial clients. As Steve explains, many online search engines use Basis technology to find relevant information stored in text. Its work is central to emerging high-tech tools for detecting money laundering and financial crime. And, If we don’t develop those better tools, put simply, we will fail. As we have discussed in other episodes, the UN estimates an annual level of $1.6 to $2 trillion in financial crime and that we catch less than one percent of it. That’s because data on these activities is proliferating, criminals and terrorists use increasingly sophisticated technology, and governments and the financial industry currently fight back with antiquated tools that are slow and that mainly find simple, bottom-rung crime, which is the least important.
Steve explains that he came to this work because it sits at the intersection of his two passions -- technology and language. We talked about how language translation is improving thanks to AI, but he makes the more profound point that this work is not about translating languages into English. It’s about integrating all languages -- with all their incredible complexity of dialects and spellings and formats and vernaculars -- into a new analytics framework.
Steve raises one of my favorite questions for people who emphasize the risks and drawbacks of new technology, namely, “compared to what?” Obviously new technology in general and AI in particular raise many risks -- from opacity to privacy issues to potential bias. We should ask, though, how well our current, human-centered tools work in solving those problems. Often, not so well -- partly because we’re so often dealing with small fragments of information. AI can help us see much more.
Steve is responsible for worldwide sales and the planning and operations of Basis Technology’s linguistic product research and development. Before starting Basis Technology with Carl Hoffman, Steve was engineering manager for Cognex Corporation’s Tokyo office and development manager for SMT device inspection. He has also consulted on software internationalization engineering and developed software for embedded systems and electronic test equipment. Steve earned a bachelor’s degree in electrical engineering from MIT and studied at Waseda University in Tokyo.
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We have great podcast episodes in the queue. We have another episode from Boston with Lamont Young, who’s leading digital innovation at Citizens Bank. We’ll talk with one of the most thoughtful people in finance, Brian Brooks, General Counsel of Coinbase and with global financial inclusion expert David Shrier. We’ll also have a special episode on Women in Fintech, and a terrific discussion with the fascinating community bank, NBKC. And we have a wonderful talk I recorded with Prince Michael of Liechtenstein, from the roundtable he hosted in Vaduz predicting the financial services world of 2030.
We also have three great shows coming up with Washington officials. One is with Counselor to the Secretary of the Treasury, Craig Phillips, whose team issued the Treasury fintech report last year. And we’re excited to have a second episode coming up with the Chairman of the CFTC, Chris Giancarlo. We also recorded a show in New York last month with Brett King about his new book, Bank 4.0 (available now on Amazon). I co-wrote the regulatory chapter with Brett and love the book — it’s an amazing read.
