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Model Drift: The Achilles Heel of AI Explained

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A machine learning model is a mathematical representation of a set of rules that are learned from data. It is the output of the process of training a machine learning algorithm. The model is then used to make predictions or decisions based on new, unseen data.

There Are Many Different Types of Machine Learning Models.

You’ll want to become familiar with the many different types of machine learning, including decision trees, random forests, support vector machines, and neural networks. Each type of model has its own strengths and weaknesses and is suitable for different types of tasks.

To create a machine learning model, you need to provide the algorithm with a set of training data. The algorithm then uses this data, along with a set of rules called a learning algorithm, to learn about the relationships and patterns in the data. The resulting model is a set of mathematical equations that capture these patterns and can be used to make predictions or decisions based on new, unseen data.

What Is Model Drift?

Model drift is when a machine learning model’s performance declines over time due to real-world changes in the data it takes as inputs. There are two main types of model drift:

  • Concept drift occurs when the relationships or patterns in the data change over time. For example, consider a machine learning model that has been trained to predict credit card fraud. The model might be trained on a data set that includes a certain proportion of fraudulent and non-fraudulent transactions. If the proportion of fraudulent transactions changes over time, the model’s performance may decline because it is no longer able to accurately predict the outcome based on the new data distribution.
  • Data drift occurs when the data itself changes over time. For example, consider a machine learning model that has been trained to classify images of animals. If the model is trained on a data set that includes images of dogs, cats, and birds, it might perform well on new images of these animals. However, if the model is then presented with a new type of animal that it has not seen before, such as a dolphin, it might perform poorly because the data it was trained on does not include any examples of dolphins.

One way to mitigate the impact of drift is to regularly retrain the model on new data to ensure that it remains accurate and up-to-date. Learn more about this technical deep-dive ML model, drift (aporia dotcom; concept of drift).

How Does Model Drift Impact Production AI Systems?

Model drift can have a significant impact on production AI systems, as it can cause them to make inaccurate predictions or classifications. This can lead to poor performance and potentially harmful decisions. In some cases, it could lead to the system malfunctioning, causing financial losses or even physical harm.

In production AI systems, model drift can occur due to changes in the distribution of the input data over time, such as changes in customer behavior or market conditions. It can also occur due to changes in the system itself, such as updates to the hardware or software.

To mitigate the impact of model drift, it’s important to regularly monitor the performance of AI systems and retrain the models as needed. Techniques such as active learning and online learning can also be used to adapt the models to changes in the input data continuously. Additionally, it can be beneficial to use ensemble methods that combine multiple models, as this can help to reduce the impact of model drift.

It’s also important to have a good understanding of the underlying data and the system to detect any signs of drift and take the necessary actions, such as retraining the model, fine-tuning the parameters, or collecting more data.

Can We Trust AI Given the Problem of Model Drift?

It is important to be aware of the potential for model drift when using artificial intelligence (AI) systems, as it can affect the accuracy and reliability of the predictions or decisions made by the model. However, this does not necessarily mean that AI systems cannot be trusted.

The key is to accept and manage the risk inherent in machine learning models. This is known as “model risk” – the risk that a machine learning model may make incorrect predictions or decisions, which can have negative consequences for its owners or users.

For example, take the case of Zillow, a real estate and rental marketplace. In 2021, it accrued losses of over $500 million due to the property valuation algorithm overestimating real estate values, leading the company to overinvest when purchasing houses. As a result, the company has had to reduce its workforce.

Zillow probably implemented rigorous testing before rolling out the machine learning model. The rollout in production was gradual, allowing the company to evaluate its performance in the real world. However, the company then expanded its purchasing program in a short period while market conditions began to change (concept drift). Thus, the model no longer reflected the real estate market.

This shows why it is important for companies to be proactive in managing model risk in order to ensure that their machine learning systems are making accurate predictions or decisions. The impact of the model drift could have been averted if Zillow monitored the model more closely.

What AI Developers Can Do About Drift

There are several things that AI developers can do to mitigate the impact of model drift:

  • Regularly retrain the model on new data: One way to ensure that the model remains accurate and up-to-date is to regularly retrain it on new data. This can help to reduce the impact of concept drift and data drift.
  • Use techniques such as online learning: Online learning is a machine learning approach that allows the model to continuously update itself as new data becomes available. This can help to reduce the impact of concept drift and data drift.
  • Monitor the model’s performance: Once the model has been deployed in a production environment, it is important to continuously monitor its performance to ensure that it is still making accurate predictions or decisions. This can help to identify any changes in the data distribution or other factors that may be causing model drift. Monitoring should be an ongoing process.
  • Use multiple models: Using multiple models can help to reduce the risk of relying on a single model that may be subject to model drift. By combining the predictions or decisions of multiple models, the overall performance of the system can be improved.
  • Add human oversight: In some cases, it may be appropriate to use human oversight to review or validate the predictions or decisions made by the model. This can help to ensure that the system is being used appropriately and that any potential issues are addressed.

Conclusion

In conclusion, model drift is a phenomenon that can significantly impact the performance of artificial intelligence (AI) systems over time. It occurs when the data distribution or relationships in the data that the model was trained on change, resulting in a decline in the model’s accuracy and reliability.

Both concept drift and data drift can be challenging to manage because they are difficult to anticipate and detect. However, by taking steps such as regularly retraining the model on new data, using online learning techniques, and using multiple models, AI developers can mitigate the impact of model drift and improve the trustworthiness of their systems.

Featured Image Credit: Provided by the Author; Vecteezy; Thank you!

Gilad Maayan

Technology writer

I’m a technology writer with 20 years of experience working with leading technology brands including SAP, Imperva, CheckPoint, and NetApp. I am a three-time winner of the International Technical Communication Award. Today I lead Agile SEO, the leading marketing and content agency in the technology industry.

Politics

Fintech Kennek raises $12.5M seed round to digitize lending

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London-based fintech startup Kennek has raised $12.5 million in seed funding to expand its lending operating system.

According to an Oct. 10 tech.eu report, the round was led by HV Capital and included participation from Dutch Founders Fund, AlbionVC, FFVC, Plug & Play Ventures, and Syndicate One. Kennek offers software-as-a-service tools to help non-bank lenders streamline their operations using open banking, open finance, and payments.

The platform aims to automate time-consuming manual tasks and consolidate fragmented data to simplify lending. Xavier De Pauw, founder of Kennek said:

“Until kennek, lenders had to devote countless hours to menial operational tasks and deal with jumbled and hard-coded data – which makes every other part of lending a headache. As former lenders ourselves, we lived and breathed these frustrations, and built kennek to make them a thing of the past.”

The company said the latest funding round was oversubscribed and closed quickly despite the challenging fundraising environment. The new capital will be used to expand Kennek’s engineering team and strengthen its market position in the UK while exploring expansion into other European markets. Barbod Namini, Partner at lead investor HV Capital, commented on the investment:

“Kennek has developed an ambitious and genuinely unique proposition which we think can be the foundation of the entire alternative lending space. […] It is a complicated market and a solution that brings together all information and stakeholders onto a single platform is highly compelling for both lenders & the ecosystem as a whole.”

The fintech lending space has grown rapidly in recent years, but many lenders still rely on legacy systems and manual processes that limit efficiency and scalability. Kennek aims to leverage open banking and data integration to provide lenders with a more streamlined, automated lending experience.

The seed funding will allow the London-based startup to continue developing its platform and expanding its team to meet demand from non-bank lenders looking to digitize operations. Kennek’s focus on the UK and Europe also comes amid rising adoption of open banking and open finance in the regions.

Featured Image Credit: Photo from Kennek.io; Thank you!

Radek Zielinski

Radek Zielinski is an experienced technology and financial journalist with a passion for cybersecurity and futurology.

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Politics

Fortune 500’s race for generative AI breakthroughs

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Deanna Ritchie


As excitement around generative AI grows, Fortune 500 companies, including Goldman Sachs, are carefully examining the possible applications of this technology. A recent survey of U.S. executives indicated that 60% believe generative AI will substantially impact their businesses in the long term. However, they anticipate a one to two-year timeframe before implementing their initial solutions. This optimism stems from the potential of generative AI to revolutionize various aspects of businesses, from enhancing customer experiences to optimizing internal processes. In the short term, companies will likely focus on pilot projects and experimentation, gradually integrating generative AI into their operations as they witness its positive influence on efficiency and profitability.

Goldman Sachs’ Cautious Approach to Implementing Generative AI

In a recent interview, Goldman Sachs CIO Marco Argenti revealed that the firm has not yet implemented any generative AI use cases. Instead, the company focuses on experimentation and setting high standards before adopting the technology. Argenti recognized the desire for outcomes in areas like developer and operational efficiency but emphasized ensuring precision before putting experimental AI use cases into production.

According to Argenti, striking the right balance between driving innovation and maintaining accuracy is crucial for successfully integrating generative AI within the firm. Goldman Sachs intends to continue exploring this emerging technology’s potential benefits and applications while diligently assessing risks to ensure it meets the company’s stringent quality standards.

One possible application for Goldman Sachs is in software development, where the company has observed a 20-40% productivity increase during its trials. The goal is for 1,000 developers to utilize generative AI tools by year’s end. However, Argenti emphasized that a well-defined expectation of return on investment is necessary before fully integrating generative AI into production.

To achieve this, the company plans to implement a systematic and strategic approach to adopting generative AI, ensuring that it complements and enhances the skills of its developers. Additionally, Goldman Sachs intends to evaluate the long-term impact of generative AI on their software development processes and the overall quality of the applications being developed.

Goldman Sachs’ approach to AI implementation goes beyond merely executing models. The firm has created a platform encompassing technical, legal, and compliance assessments to filter out improper content and keep track of all interactions. This comprehensive system ensures seamless integration of artificial intelligence in operations while adhering to regulatory standards and maintaining client confidentiality. Moreover, the platform continuously improves and adapts its algorithms, allowing Goldman Sachs to stay at the forefront of technology and offer its clients the most efficient and secure services.

Featured Image Credit: Photo by Google DeepMind; Pexels; Thank you!

Deanna Ritchie

Managing Editor at ReadWrite

Deanna is the Managing Editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind and has over 20+ years of experience in content management and content development.

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Politics

UK seizes web3 opportunity simplifying crypto regulations

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Deanna Ritchie


As Web3 companies increasingly consider leaving the United States due to regulatory ambiguity, the United Kingdom must simplify its cryptocurrency regulations to attract these businesses. The conservative think tank Policy Exchange recently released a report detailing ten suggestions for improving Web3 regulation in the country. Among the recommendations are reducing liability for token holders in decentralized autonomous organizations (DAOs) and encouraging the Financial Conduct Authority (FCA) to adopt alternative Know Your Customer (KYC) methodologies, such as digital identities and blockchain analytics tools. These suggestions aim to position the UK as a hub for Web3 innovation and attract blockchain-based businesses looking for a more conducive regulatory environment.

Streamlining Cryptocurrency Regulations for Innovation

To make it easier for emerging Web3 companies to navigate existing legal frameworks and contribute to the UK’s digital economy growth, the government must streamline cryptocurrency regulations and adopt forward-looking approaches. By making the regulatory landscape clear and straightforward, the UK can create an environment that fosters innovation, growth, and competitiveness in the global fintech industry.

The Policy Exchange report also recommends not weakening self-hosted wallets or treating proof-of-stake (PoS) services as financial services. This approach aims to protect the fundamental principles of decentralization and user autonomy while strongly emphasizing security and regulatory compliance. By doing so, the UK can nurture an environment that encourages innovation and the continued growth of blockchain technology.

Despite recent strict measures by UK authorities, such as His Majesty’s Treasury and the FCA, toward the digital assets sector, the proposed changes in the Policy Exchange report strive to make the UK a more attractive location for Web3 enterprises. By adopting these suggestions, the UK can demonstrate its commitment to fostering innovation in the rapidly evolving blockchain and cryptocurrency industries while ensuring a robust and transparent regulatory environment.

The ongoing uncertainty surrounding cryptocurrency regulations in various countries has prompted Web3 companies to explore alternative jurisdictions with more precise legal frameworks. As the United States grapples with regulatory ambiguity, the United Kingdom can position itself as a hub for Web3 innovation by simplifying and streamlining its cryptocurrency regulations.

Featured Image Credit: Photo by Jonathan Borba; Pexels; Thank you!

Deanna Ritchie

Managing Editor at ReadWrite

Deanna is the Managing Editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind and has over 20+ years of experience in content management and content development.

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