ChatGPT is a publicly available AI tool with many potential applications. So, can ChatGPT affect the banking industry?
Artificial intelligence has advanced by leaps and bounds, and ChatGPT is one of the latest AI tools. In 2022, AI developer OpenAI opened up the application of ChatGPT to the public.
Since ChatGPT's launch, its monthly active users have topped 100 million, a feat that TikTok took 9 months to accomplish.
With so much hype and hype, many industries are adopting this new AI tool to see how it works for them. Because of the power it has, ChatGPT has a place in almost every industry.
This tool has the potential to have an impact on all sectors, including banking. Learn more about ChatCPT and its potential impact on the banking industry below.
What is ChatGPT?
To better understand how ChatGPT affects the banking industry, it's crucial to understand how it works. ChatGPT is an artificial intelligence computer program that receives, understands, and responds using human-like language, rather than giving answers that sound robot-sounding.
The program is equipped with a Ttransformer-based neural network with a large amount of data and information as of 2021. This means that when a human user enters a command or question, the AI receives, processes, analyzes it through its deep neural network, and outputs it in a text pattern that mimics human phrasing.
ChatGPT can take full conversations, admit mistakes, challenge incorrect questions, and write articles, scripts, and headlines. Thanks to its intelligence and huge database, ChatGPT can serve many industries – even banking.
How is ChatGPT applied to banking?
As a customer, which bank's services to adopt is a personal decision that requires deliberation. On the other hand, the banking industry is constantly looking for ways to stay ahead of its competitors by creating the best experience and maximum operational efficiency for its customers.
ChatGPT can provide customers with multiple services and experiences such as automation, customer support, security, and personalization.
(1) Automation
Automation is a feature offered by many platforms to provide streamlined customer processes and save more time for employees.
Routine tasks like online banking no longer need to be done manually, and AI like ChatGPT can solve these problems. From account balance inquiries to bill payments to transfer requests, banks can leverage ChatGPT to reduce employee workload.
(2) Customer Service
Chatbots have become a more common form of customer service that can handle more straightforward tasks that customers may need. Banks can integrate ChatGPT into customer service systems to provide real-time answers, reduce wait times, and improve the overall experience.
Banks often encounter a large number of inquiries that their agents can't handle, and ChatGPT can do the job, leaving more time for human agents to answer more complex questions.
(3) Security
Above all, customers expect a high level of security from banks. While ChatGPT certainly can't handle all security measures, it can serve as another level of protection.
ChatGPT has incredible analytical skills that can be used to help human analysts detect fraud through their massive neural network data. ChatGPT can also authenticate users, verify information, and monitor activity.
(4) Personalization
Customers love the feeling of being taken care of alone. Since ChatGPT has the ability to analyze data, it can help banks provide personalized services to customers. ChatGPT will analyze customer data and provide financial and product recommendations.
For example, if a customer wants to apply for a new credit card, ChatGPT can analyze their spending habits, preferences, and financial situation and recommend the best credit card for them.
(5) Processing documents
ChatGPT can help automate the underwriting process for loans and other documents that require approval. ChatGPT can verify customer information to assess risk.
Once employees know what qualifications the customer is, they will have more time to deal with the customer than to do it manually.
(6) Market research
Banks need to know how to retain customers, and market research is an important part of this process to understand the latest consumer preferences.
ChatGPT can gather insights through surveys and questionnaires, and then analyze the data to provide useful feedback for bankers to make decisions.
(7) Email marketing
One might think that banks are marketers, but if you think about it, don't people always receive offers and advertisements from banks? No matter how big the bank is, they have a marketing team responsible for customer communications.
ChatGPT can generate personalized email campaigns based on customer behavior and known preferences based on analytics data. Whether it's topic optimization, message segmentation, A/B testing, or body copying, ChatGPT can generate this information for a more straightforward writing process.
(8) Role playing
Based on these market studies, ChatGPT can also help influence email marketing and the way bankers talk to customers. Due to its powerful language processing capabilities, ChatGPT can actually simulate scenarios.
For example, a banker could ask ChatGPT, "How do doctors want to notify us that their checking account has been frozen?" The AI system will take this question, delve into its neural network, and come up with an answer that offers recommendations on how to pass the information and by which methods it should be delivered.
(9) Social media management
Nowadays, most companies have social media. In the world of social media, there's a lot of room for automation. ChatGPT can be implemented in the bank's social media practices through scheduling, advertising, and analytics.
ChatGPT can optimize social media posts based on audience behavior, preferences, and peak usage times. On the advertising side, ChatGPT can analyze data and recommend the best ad formats and creative elements for banks' advertising campaigns.
As for analytics, AI will analyze data and provide insights into customer behavior, preferences, and trends, providing actionable insights for developing stronger strategies.
(10) Risk management
Customers entrust banks with their money to make informed decisions, and banks must be able to identify potential risks and market trends. There is no doubt that banks can use artificial intelligence for this task, as this technology can analyze large amounts of data in real time.
ChatGPT is an AI program that helps banks with risk management because it has a large pool of data.
What are the disadvantages of using ChatGPT in banking?
While ChatGPT is undoubtedly a considerable resource for the banking industry, there are some drawbacks that should be noted:
Cost: Although ChatGPT is free software, there are some costs to adopt in the banking system. Banks must consider the costs of consolidation, training and deployment, maintaining operating costs, and keeping up with regulatory measures. ChatGPT is a great resource, but it may not be available to small and medium-sized banks on a tight budget.
Security: OpenAI, the creator of ChatGPT, has taken a number of steps to ensure the security and privacy of ChatGPT users. However, in addition to ChatGPT, banks need to take their own actions to protect the security of their users. This can be seen as an additional task and concern for the bank, making the process less efficient.
Limited human interaction: While automation does have its benefits, it does reduce human interaction.
For those who prefer to talk to humans, going through many steps with AI before the system allows them to pass through can be frustrating. In addition to this, the implementation of artificial intelligence means that there is less demand for humans, making the job market smaller.
Technology dependence: Technology is an incredible tool, but it can never completely replace humans. Reliance on ChatGPT can lead to negligence and blind decision-making, which can lead to errors on the part of the bank.
Limitations of AI: While ChatGPT has a wide range of uses, it also has limitations. AI programs may not understand the context of a situation or provide solutions to overly complex problems.
In addition, ChatGPT's database only has access to information before 2021, so no new laws or trends can be added to the scope of AI consideration. While ChatGPT is highly intelligent, its database is the internet, and not everything about the internet's information is accurate. Therefore, when using the tool, accuracy cannot be 100% guaranteed, so banks must verify accuracy.
The future of ChatGPT in banking
As AI programs continue to evolve, it still has the potential to improve several aspects of the banking industry.
With customer service at the top of the list, banks can stand out from the competition with the ability to help around the clock. ChatGPT's advanced algorithms can analyze large amounts of data and provide customers with real-time information and recommendations.
If a bank can offer this kind of service to its customers, or if this information can help bankers make decisions, that would be another huge advantage for the future of banking. Finally, ChatGPT's potential to reduce risk is a big incentive for banks to consider implementing the technology. The safer the bank, the more likely customers are to be attracted to it.
Due to the power that AI cannot ignore, ChatGPT will have more impact on the banking industry in the future.
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