How to Analyze Company Risk Factors from SEC Reports with AI
Using custom NLP model and chatGPT
In today’s complex business landscape, organizations face a multitude of risks that can impact their operations and bottom line. Identifying and analyzing these risks, known as risk factor analysis, is crucial for effective decision-making and risk management strategies by investors. Traditionally, this process has relied heavily on manual efforts, often prone to errors and time-consuming. However, with the advent of AI technologies such as deep learning models, organizations now have the opportunity to leverage its power to enhance their risk factor analysis capabilities.
The “risk factors” section found in the 10-K report holds immense value in shedding light on critical areas that often escape the attention of many investors. While the majority of the content consists of standard risk disclosures, it is the insightful examination of factors such as new regulations and laws, market risk, macroeconomic conditions, that unveils hidden complexities.
In this tutorial, we delve into the key steps involved in training a custom AI model that identifies risk factors from SEC 10-K reports and integrating it into a workflow that analyses the results using chatGPT. We also highlight the importance of human-in-the-loop review for refining the…
