FDIC DOF Artificial Intelligence Machine Learning
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Artificial Intelligence
Machine Learning
@ FDIC DOF
Dr. Fatena El-Masri,
PhD Computational Science and Informatics, GMU
Master of Finance, GWU
PhD AI Face Recognition, NSW University, Australia (ABD)
Master of Engineering, Sydney University, Australia
F. El-Masri: AI Presentation 7/12/2021 Disclaimer: This PPP is only the author’s view of using AI/ML
Objectives
1. Brief History of AI
2. Definition & Examples of AI
3. Difference Between AI, ML, DL
4. AI Matters
5. Difference between Statistics and ML
6. Different Types of Machine Learning
7. Why AI matters to DOF – Accounting
8. Why AI Matters to DOF - Auditing
9. How I used AI
10. Where is AI Going Next?
11. Any Questions
F. El-Masri: AI Presentation 7/12/2021
Brief History of AI
• Recent movie of his life - “The Imitation Game”
• Created “Christopher” to break WWII German encryption
“Enigma”
• Established standard for AI systems
Alan Turing “Does the AI system demonstrate human intelligence?”
(1912-1954)
Turing Test
During the Turing test, the
human questioner asks a
• Computer scientist who coined the term "artificial intelligence"
series of questions to both
in 1955
respondents.
• Put AI theory into practical applications
After the specific time, the
questioner tries to decide
• Created AI centers at Carnegie Mellon and MIT
which terminal is operated
John
by theMcCarty
human respondent
(1927-2011)
and which terminal is
operated by the computer.
F. El-Masri: AI Presentation 7/12/2021
Defining AI & Examples F. El-Masri: AI Presentation 7/12/2021
Difference Between AI, ML, DL F. El-Masri: AI Presentation 7/12/2021
AI Matters Difference between Humans & Machines F. El-Masri: AI Presentation 7/12/2021
Difference between Statistics and ML F. El-Masri: AI Presentation 7/12/2021
Different Types of Machine Learning F. El-Masri: AI Presentation 7/12/2021
Why AI Matters to DOF - Accounting
Accounting and Auditing involves lots of
repetitive work and processes.
AI can provide savings in terms of time and
money by optimizing the repetitive
processes.
AI can:
• Gather and sort GL data
• Automate the processing of data and
uploading of documents
• Cluster and segment information or files
to classify according to the GL
• Generate real-time reporting
F. El-Masri: AI Presentation 7/12/2021
Why AI Matters to DOF - Auditing
AI can assist with:
• Insurance determinations by cross
referencing accounts by type and/or
amount, increasing accuracy
• Detection of bank fraud:
• Tools to use historical data to
detect / track fraud annually
• Use unstructured data (i.e. emails,
voice, reports etc.)
• Detect anomalies or any illegal
trading or action
F. El-Masri: AI Presentation 7/12/2021AI & Automated Processes
Robotic/Intelligent Process Automation (RPA) & (IPA)
Natural Language Processing (NLP)
Blockchain
Future
Present
Past
F. El-Masri: AI Presentation 7/12/2021AI & Automated Processes
Natural Language Processing (NLP) Robotic Automated Process RPA
Financial
Statements
ChatBot Web Knowledge
Financial Program Service Base
Reporting
FDIC Future Uses for AI
Auditing
ChatBot Another Another
Budgets Analysis App?? App?? App??
Safety and
Soundness of the
corporation
Automated GL
Data Entries Unstructured Natural
Advanced
Data Language
Financial Analytics
Extraction Proc. (NLP)
Regulations
F. El-Masri: AI Presentation 7/12/2021Robotic Process Automation(RPA) • Using RPA to automate business processes and data entries. • Through data analytics and engineering, some business processes could be modified to be more efficient and support different types of data analysis and work queries. • KPMG and IBM use RPA such as IBM Watson and Blue Prism to address the issues of data identification and extraction at a much faster pace than a human by automating and avoiding human errors. • RPA, in conjunction with Audit Process Automation (APA), helps reduce the extensive manual lift, which saves time and money associated with human capital and increases the quality of auditing services. • RPA enables informed decisions to be made based on data engineering and analysis of large, complex datasets. F. El-Masri: AI Presentation 7/12/2021
Natural Language Processing (NLP)
NLP is used to extract all required information and to automate the processes in simple
queries. It also helps establish the current and forecasted GL state for the Corporation.
NLP is used to assess audit risk by understanding the entity and its environment,
including the internal controls.
NLP helps automate financial reporting as needed, particularly in financial statements.
• NLP currently is heavily used for auditing and accounting for the following
items:
Auditing review and financial reporting
Corporate financial performance
Management’s assessment of the present and future performance
Regulations standards and procedures
Compliance standards and regulations
F. El-Masri: AI Presentation 7/12/2021AI Algorithms in A&A
• AI is the optimum tool used in repetitive and time consuming data retrieval
processes to assist with monthly reporting.
• AI enables the SME to spend their time on strategic planning and other consumer
or customer behavioral tasks.
• A&A has already been using supervised machine learning algorithms in order to
forecast and optimize a variety of different predictive models.
• AI is used for audit mining to go through a massive amount of transactional data to
provide more accurate and precise reconciliations.
• AI is used for digital marketing and analytics to better predict operational
efficiencies, improve trend analysis, and to optimize data in algorithmic models,
producing gains in speed over traditional accounting and budgeting processes.
• AI is widely used for better revenue improvement and funds allocations throughout
the Corporation.
F. El-Masri: AI Presentation 7/12/2021How I Used AI
Agent-Based Modeling
to Predict Failing Banks:
• Simulated 63m records of 6k banks
(their assets, liabilities & equities)
• Developed computational method for
simulating actions/interactions of autonomous
agents
• Discovered contagion & cascading effect
F. El-Masri: AI Presentation 7/12/2021Where is AI Going Next?
“I think the human and the computer are
really, really quickly becoming one tightly-
coupled cognitive unit.”
Shimon Whiteson,
Assoc. Prof.
University of Amsterdam
F. El-Masri: AI Presentation 7/12/2021Thank you F. El-Masri: AI Presentation 7/12/2021
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