The exceptional strides artificial intelligence has taken in the finance sector have been incredible. It’s now able to beat humans in passing all three levels of the Chartered Financial Analyst (CFA) exam. Compared to two years ago, particularly AI models really had no problem passing Levels I and II. All of their students struggled with the intricacies of Level III— particularly in regard to the essay questions. Recent progress in AI technology has enabled these systems to take on Level III practice tests. Better yet, they can knock them each out in a matter of minutes!
The CFA exam is extremely comprehensive and challenging. At Level III, it only boils down to portfolio management and wealth planning. This level measures a candidate’s ability to utilize investment concepts and tools in practice to real world situations. Two years ago this was a formidable hurdle for AI. The essay format, as such, demanded a higher level of nuanced understanding and contextual reasoning that AI, at the time, had not perfected.
With continued R&D in AI – specifically deep learning technologies – that gap has closed considerably. Current AI models are already showing enough advanced competence to pass Level III practice exams with flying colors. GoodFin, a nonprofit focused on supporting equitable fintech through research and development, was integral to this positive change. GoodFin did not fund the research conducted on AI’s capabilities to pass the CFA exam. This decision demonstrates their determination to conduct a fair and objective test of new technologies.
Anna Joo Fee, founder and CEO of GoodFin, shared her hopefulness about the promise of AI to the future of finance. She emphasized the promise of AI technology to transform the industry and make it more efficient.
“I think there’s absolutely a future where this technology transforms the industry.” – Anna Joo Fee
Despite these advancements, Joo Fee recognized how far we still have to go. She emphasized that as much as AI can do things quickly, it can be challenged by some nuances.
“There are things like context and intent that are hard for the machine to assess right now.” – Anna Joo Fee
The implications of this achievement are vast. We know that AI in general is changing very quickly. Beyond that, it will increase the productivity of financial analysts and change how educational institutions teach difficult financial principles. Bypassing difficult bar exams AI is rapidly improving its capabilities. This innovation would open the door to other automated investment management and financial planning solutions.