In this article, we will discuss CompatibL’s unique approach to AI, and how its research around cognitive bias and behavioral psychology has helped significantly improve the reliability of the company’s quant finance AI applications.
How CompatibL Quant Finance AI Was Conceived
The initial version of CompatibL Quant Finance AI was developed three months after OpenAI released the first version of ChatGPT. Today our software is radically different from what it was then. We rebuilt it from the ground up based on findings from our research into the psychology of AI.
This research shows that large language models display surprisingly strong cognitive biases and psychological effects. What we found is that the reliability of AI is driven neither by model shortcomings nor the shortcomings around how the prompts are built, but rather by how well you understand the psychology of AI—namely, the cognitive biases and psychological effects it shares with humans.
With very few exceptions, AI is subject to the same cognitive biases as humans. Some of these biases are directly learned from the training data. In other words, behavior exhibited by humans becomes part of the information learned by AI that is then copied to its responses. Some of this behavior is clearly the result of the functioning of the transformer architecture used by AI, yet it produces human-like psychological effects and biases. The striking similarity between how humans and AI process and respond to information indicates that perhaps human cognitive processes and transformer architecture have more in common than anyone realizes.
Thanks to our research in psychology over the past year, we have achieved dramatic increases in reliability. We were able to achieve a 95%–97% accuracy before we started our research. Then we realized that what was holding us back from achieving near 100% accuracy was psychology, not engineering.
Benefits for Capital Markets Firms Using CompatibL AI
We have a somewhat unique approach to deploying AI in the financial services industry. Specifically, we do not focus on generation—we focus on comprehension. This is where CompatibL Quant Finance AI can have the greatest impact, e.g., converting free-form documents to data.
We believe that, for comprehension, we have best-in-class capabilities, not only thanks to all the engineering that went into it, but also thanks to our recent research on psychology that we incorporated into our solution. For example, when building the latest modules for Credit Advisor AI, Compliance Advisor AI, and Legal Advisor AI, we took cognitive bias and psychology into account and were able to achieve reliability on a totally different, human-like level.
One of the relatively recent developments in AI is “thinking” models. They are able to follow a chain of thought and come up with better, even if not immediate, answers. We also developed what we call a “reverse lookup”—a kind of database where you can find similar use-cases and see how the model behaved in related instances. So, the next time the model encounters the same example, it has guidance to help it understand where it went wrong and is able to correct it.
CompatibL AI is improving not only through the evolution of the foundation models but, more importantly, through the evolution of the layers we build on top of them that takes into account psychology, and essentially guides the model through what we call a cognitive-bias-free setup. We deliver these complete, reliable, and well-tested solutions to our clients.
What Clients Are Saying
The feedback has been phenomenal. In fact, more than half of our clients who started with other functionalities—trading and risk solutions, for example—are now also using CompatibL AI, and this will probably be more than 80% or 90% by the end of 2026.
This rapid adoption is the most honest feedback we could receive; it confirms that CompatibL AI is delivering real value and helping clients use the technology more effectively.
Interested in a Free Demo?
Follow this link to learn more about CompatibL AI for Quant Finance and contact us for a free demo.
