Wednesday 25 October 2023

Large Language Models are ineffective for accurate data extraction in banking sector.

In recent years, we have seen a revolution in the field of natural language processing with the emergence of large language models (LLMs). These models have demonstrated impressive capabilities in understanding and generating human-like text. However, when it comes to sensitive and complex operations within the banking sector, relying solely on LLMs for the extraction of exact data from documents raises valid concerns.

While LLMs have their merits, the intricacies of banking operations demand a higher level of accuracy and precision that these models might struggle to consistently provide. There is a growing concern about their reliability and accuracy, especially when it comes to AI hallucinations in data extraction models. In this article, I will delve into the challenges posed by using LLMs for data extraction in banking and explore the potential risks and consequences associated with their use.

LLMs work on the principle of creating the next string of text based on a model output that has learned the language and logic of answering prompts. However, this is not equivalent to extracting exact data. Large language models lack precision by design, as they predict the most probable next word in a sequence based on patterns learned from training data. In the context of banking, where accuracy is crucial, even a minor deviation from the exact data could have significant financial and legal implications.

Using generative AI for precise data extraction can be likened to sending a creative artist to paint a meticulously detailed map. While the artist may produce a masterpiece full of imagination and flair, relying on them for accurate cartography could result in distorted landscapes and missing landmarks. Similarly, generative AI’s tendency to prioritize fluency and coherence over exactness in data generation can lead to incorrect data extraction, causing severe operational errors.

To better understand the strength of statements, predictions, or responses generated by large language models, we can consider three distinct scenarios: “possible,” “plausible,” and “probable.”

In the context of data extraction using AI, something is considered “possible” if it can exist or occur within logical or physical constraints. It implies that there is no inherent contradiction or violation of established principles.

“Plausible” refers to the degree of believability or reasonableness of a statement or idea. If something is plausible, it is likely to be accepted as true or valid based on available information, but it may not necessarily be proven or confirmed.

“Probable” signifies the likelihood or chance that an event will occur or be true. It involves assessing the relative likelihood of different outcomes based on evidence or reasoning. An event that is probable is likely to occur but does not guarantee certainty.

When it comes to data extraction using AI, “possible” refers to information that can be theoretically extracted from a given text or dataset without violating any rules or constraints. “Plausible” involves making educated guesses based on contextual information, while “probable” relates to the likelihood of accurately extracting specific data points based on observed patterns in the training data.

While large language models have shown their capabilities in various language-related tasks, they may not be the most suitable solution for complex banking operations that require precise data extraction from documents. The potential risks and consequences, including errors in precision, regulatory violations, legal liabilities, data security breaches, and inconsistency, outweigh the benefits, leading to what is known as AI hallucinations.

AI hallucinations occur when language models generate outputs that appear plausible but are ultimately incorrect or nonsensical. These outputs stem from the model’s overreliance on patterns learned during training, even when those patterns do not fit the context or are statistically improbable. This poses significant challenges to the reliability and trustworthiness of LLMs in data extraction within the banking sector.

Firstly, banking documents often contain dense, highly specialized information, legal jargon, and intricate numerical data. Extracting specific information accurately requires not only picking the exact data but also comprehending the domain-specific nuances. While LLMs have impressive language comprehension abilities, they may struggle to fully grasp the complexity of financial documents, leading to misinterpretations that can impact important decisions.

Secondly, banking operations must comply with strict regulatory frameworks designed to ensure transparency, security, and fairness. Accurate data extraction is crucial for compliance with regulations such as Anti-Money Laundering (AML) and Know Your Customer (KYC). Relying solely on LLMs for this task can result in incomplete or inaccurate extractions, exposing financial institutions to regulatory fines and legal liabilities.

Inconsistency and reliability are also major concerns when relying on LLMs for data extraction. These models generate outputs based on probabilistic patterns, which means they can sometimes provide inconsistent results. In the context of banking operations, where accuracy and consistency are non-negotiable, depending solely on LLMs introduces an element of unpredictability that erodes trust in the system.

Lastly, LLMs are trained on vast datasets from the internet, which may not perfectly align with the intricate data structures and language used in banking documents. This mismatch between training data and the domain-specific content of banking documents can lead to suboptimal performance and errors.

To sum it up, while LLMs have proven their capabilities in various language tasks, caution must be exercised when applying them to complex banking operations that necessitate accurate data extraction. The potential risks of using LLMs, such as errors in precision, regulatory violations, legal liabilities, data security breaches, and inconsistency, outweigh the benefits. The phenomenon of AI hallucinations further emphasizes the need to rely on more reliable and precise methods for data extraction within the banking sector.

Editor Notes:

The article provides valuable insights into the challenges and risks associated with using large language models for data extraction in the banking sector. It highlights the importance of accuracy and precision in this context and emphasizes the potential consequences of relying solely on LLMs. Financial institutions must carefully consider the limitations of these models and explore alternative methods for data extraction to ensure compliance, minimize errors, and maintain customer trust.

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