Originally published in the inaugural edition of Carroll Capital, the print publication of the Carroll School of Management at Boston College. .
In this era of ChatGPT鈥攖he online 鈥渃hatbot鈥� that can answer questions and even write essays鈥攊t鈥檚 easy to assume that humans can no longer compete with computers. The research of Miao Liu, a Carroll School accounting professor, offers hope to our embattled species.
Writing in the , Liu examined loans by a small-business lender in China. He found that a machine-learning model, a form of artificial intelligence, did beat humans in analyzing hard information, like financial statements and performance ratios. But humans 鈥渉ave strengths in acquiring soft information,鈥� Liu wrote. Soft information would include, for example, the听reasons why someone鈥檚 business might have run into temporary troubles.
He concluded that humans were using the numbers as signals. If a number caught their attention鈥攕ay, a surprising drop in cash flow鈥攖hey鈥檇 follow up with the help of a technology that has existed for more than 100 years: the telephone. Simply put, they鈥檇 call borrowers and find out what was happening with their businesses. Then they could use their judgment to decide whether someone deserved a loan.
AI-generated information allows humans to focus their brain power on what they do best. The results? Better than what the machine would have recommended.
