Artificial intelligence has made great strides and one of the latest programs in everyone’s Google search is ChatGPT. In 2022, OpenAI, an artificial intelligence research and development company, will opened ChatGPT to the public.
Since launch, it’s on track to surpass 100 million active monthly users, a feat that took TikTok nine months to achieve.
With so much hype, many industries are turning to the new AI to see how it can work for them. And because of its capabilities, there is a place for ChatGPT in virtually every industry.
This tool has the potential to make an impact everywhere, including the banking sector. Keep reading to learn more about ChatCPT and its potential impact on banking.
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Table of Contents
What is ChatGPT?
To better understand how ChatGPT can affect banking, it is crucial to understand how it works. ChatGPT is an artificial intelligence computer program that can record, understand and produce a response using human-like language instead of providing a response that sounds like a robot.
The program is equipped with a transformer-based neural network with extensive data and information until 2021. This means that when a human user enters a command or question, the AI takes it, processes it, analyzes it through its deep neural network and produces an output in a text pattern that mimics human diction.
ChatGPT can carry on entire conversations, admit mistakes, question incorrect premises, and write essays, scripts, articles, and headlines. Due to its intelligence and huge database, ChatGPT can serve many industries, even banking.
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How can ChatGPT be used in the banking industry?
As a patron, it is a personal decision that you should think carefully about who you bank with. On the other hand, the banking industry is constantly looking for ways to stay ahead of its competitors by creating the best possible customer experience and the most operational efficiency for its employees.
ChatGPT can provide intelligence to parts of the experience, including automation, customer support, and personalization. Keep reading to learn more about each.
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Automation
Automation is a feature many platforms offer to provide streamlined customer processes and return time to employees.
Routine tasks such as online banking no longer need to be done manually like artificial intelligence ChatGPT can take care of that. Banks can use ChatGPT to ease the workload for their employees, from checking account balances to bill payments and transfer requests.
Customer service
Chatbots have become a more common form of customer service, handling the simpler tasks customers may need. Banks can integrate ChatGPT in their customer service system to provide real-time responses that can reduce wait times and improve the overall experience.
Banks often deal with volumes of queries that are too much for their agents to handle, but ChatGPT can reduce that volume and leave more time for human service agents to answer the more complex queries.
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Security
Customers especially want banks that offer a high level of security. While ChatGPT certainly cannot handle all security measures, it can serve as another level of protection.
ChatGPT has incredible analytics skills and can be used to help human analysts detect fraud through its massive neural network data. ChatGPT can also authenticate users, verify information and monitor activity.
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Personalization
Customers like to feel that they are being cared for individually. Because ChatGPT can analyze data, it can help banks to offer personalized services to their customers. ChatGPT analyzes customer data and provides financial and product advice.
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 credit card that best suits them.
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Process
ChatGPT can help automate the acceptance process for documents such as loans and others that require approval. ChatGPT can verify client information to calculate eligibility and assess risk.
Instead of a human having to do this manually, employees have more time to work with clients once they know what the client qualifies for.
Marketing research
Banks need to know what their customers want to keep them around. Market research is an essential part of that process of keeping abreast of consumer preferences and trends.
ChatGPT can conduct surveys and questionnaires to gather insights and then analyze that data to generate useful feedback for bankers to make decisions.
Email advertising
You might think of a bank as a marketer, but think about it: don’t you always get offers and advertisements from your bank? Regardless of the size of the bank, they have marketing teams dedicated to customer communication.
ChatGPT can generate personalized email campaigns based on customer behavior and known preferences through analyzed data. Whether it’s subject line optimization, email segmentation, A/B testing, or body copy, ChatGPT can produce that information to make the writing process easier.
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Role play
Based on that market research, ChatGPT can also help influence email marketing and how bankers interact with customers. Due to its language processing ability, ChatGPT can actually mimic situations.
For example, a banker might ask ChatGPT, “How would a doctor like to be notified that we have placed a hold on their checking account?” The AI would take that question, dive into its neural network, and produce an answer that offers suggestions on how to deliver the information and through what methods to deliver the information.
Social media management
Nowadays, most companies have social media. And in social media there is so much room for automation. ChatGPT can be implemented in banks’ social media practices through scheduling, advertising and analytics.
ChatGPT can optimize social media posts based on audience behavior, preferences, and peak usage times for scheduling. In advertising, ChatGPT can analyze data and recommend the best ad formats and creative elements for a bank’s campaign.
In terms of analytics, the AI will analyze data and provide insight into customer behavior, preferences, and trends to provide actionable insights for creating a stronger strategy.
Risk management
Customers trust their bank to make smart decisions with their money. Banks must be able to identify potential risks and market trends. Banks can undoubtedly use AI for this task as technology can analyze massive amounts of data in real time.
ChatGPT is an AI program that can help with risk management due to its huge data pool.
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What are some disadvantages of using ChatGPT in the banking industry?
While ChatGPT can certainly be a significant resource for the banking industry, there are certain drawbacks that banks should have look after:
- Cost: While ChatGPT is free, the cost of implementing it in a banking system is not. Banks should consider how much it would cost to integrate, train and deploy, maintain ongoing operational costs and keep up with regulatory costs. ChatGPT is a great resource, but may not be accessible to smaller banks on tighter budgets.
- Security: OpenAI, the creator of ChatGPT, has taken massive measures to ensure the security and privacy of ChatGPT users. However, banks must take their own action alongside ChatGPT to ensure the safety of its users. This can be seen as an additional task and concern for banks, making the process less efficient.
- Limited human interaction: While automation certainly has benefits, it does reduce the need for human labor.
For people who prefer to talk to a human, it can be frustrating to go through many steps with artificial intelligence until the system lets them through. In addition, the implementation of AI means less need for people, which makes the labor market a lot smaller.
- Technology Dependence: Technology is an incredible resource, but there is never a complete alternative for humans. The dependency on ChatGPT can lead to dependencies that can lead to inattention and blind decision-making that can lead to errors on the part of the bank.
- AI Limitations: While ChatGPT can be used extensively, it also has its limitations. The AI program may not be able to understand the context of a situation or provide solutions to overly complex problems.
In addition, ChatGPT’s database only has access to information until 2021, so any new laws or trends cannot be added to the AI’s considerations. While ChatGPT is highly intelligent, its database is the internet, where not everything is accurate. Therefore, there is no 100% guarantee of accuracy when using the tool, so banks have to verify the accuracy.
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The future of ChatGPT in the banking industry
As the artificial intelligence program continues to evolve, it still has the potential to improve several aspects of the banking industry.
Since customer service is a high priority, banks can provide 24/7 assistance to differentiate themselves from their competition. ChatGPT’s advanced algorithms can analyze large amounts of data and provide customers with real-time information and suggestions.
If a bank can provide that service to its customers or if that information can help bankers make decisions, that’s another big benefit for the future of banking. Finally, ChatGPT’s potential to reduce risk is a big motivator for banks to look into implementing the technology. The more secure a bank is, the more likely customers will flock to it.
With artificial intelligence impossible to ignore, there are many future ramifications ChatGPT could have in the banking industry.
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