Artificial intelligence has made progress in leaps and bounds, and one of the newest programs in everyone’s Google search is ChatGPT. In 2022, OpenAI, an artificial intelligence research and development company, opened ChatGPT to the public.
Since its launch, it is on the way to surpassing 100 million active monthly users, a feat that took TikTok nine months to accomplish.
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 just about every industry.
This tool has the potential to make an impact everywhere, including the banking industry. Keep reading for more on ChatCPT and its potential impacts on banking.
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What is ChatGPT?
To better understand how ChatGPT can impact banking, it is crucial to know how it works. ChatGPT is an artificial intelligence computer program that can intake, comprehend and produce a response using human-like language rather than giving an answer that sounds like a robot.
The program is equipped with a transformer-based neural network with extensive data and information up to 2021. This means that when a human user inputs a command or question, the AI intakes it, processes it, analyzes it through its deep neural network and produces an output in a text pattern that mimics human diction.
ChatGPT can have entire conversations, admit mistakes, challenge incorrect premises and write essays, scripts, articles and headlines. Because of its intelligence and massive database, ChatGPT can serve many industries — even banking.
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How can ChatGPT be used in the banking industry?
As a patron, who you bank with is a personal decision that requires much consideration. On the other side, the banking industry is constantly seeking ways to stay ahead of its competitors by creating the best customer experience possible and the most operational efficiency for its employees.
ChatGPT can offer intelligence to parts of the experience, including automation, customer support and personalization. Keep reading for more details on each.
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Automation
Automation is a feature many platforms offer to offer streamlined customer processes and give time back to employees.
Routine tasks like online banking no longer need to be done manually, as artificial intelligence like ChatGPT can take care of that. From account balance inquiries to bill payments to transfer requests, banks can utilize ChatGPT to reduce the workload for their employees.
Customer service
Chatbots have become a more common form of customer service, handling the more straightforward tasks that customers may need. Banks can integrate ChatGPT into their customer service system to provide real-time answers that can reduce wait times and improve the overall experience.
Often banks experience high volumes of inquiries 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 inquiries.
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Security
Above all else, customers want banks that offer high-level security. While ChatGPT certainly can’t handle all security measures, it can serve as another level of protection.
ChatGPT has incredible analysis 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 love to feel like they are taken care of individually. Because of ChatGPT’s ability to analyze data, it can help banks offer personalized services to their customers. ChatGPT will analyze customer data and offer financial and product advice.
For example, if a customer is looking to apply for a new credit card, ChatGPT can analyze their spending habits, preferences and financial situation and recommend the credit card that will work best for them.
Processing
ChatGPT can help automate the underwriting process for documents like loans and others needing approval. ChatGPT can verify customer information to calculate eligibility and assess risk.
Instead of a human having to do this manually, employees will have more time to work with customers once they know what the customer is eligible for.
Market research
Banks need to know what their customers want to keep them around. Market research is an essential part of that process to stay up-to-date on consumer preferences and trends.
ChatGPT can conduct surveys and questionnaires to gather insights, then analyze that data to generate helpful feedback for bankers to make decisions.
Email marketing
You might consider a bank as a marketer, but think about it: Don’t you always receive offers and advertisements from your bank? No matter the size of the bank, they do have marketing teams tasks with customer communication.
ChatGPT can generate personalized email campaigns based on customer behavior and known preferences through analyzed data. Whether subject line optimization, email segmentation, A/B testing or body copy, ChatGPT can produce that information to make for a more straightforward writing process.
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Role-playing
Based on that market research, ChatGPT can also help influence email marketing and how bankers speak to customers. Because of its language processing ability, ChatGPT can actually mimic situations.
For example, a banker could ask ChatGPT, “How would a doctor like to be notified that we have placed a hold on their checking account?” The AI would intake that question, delve into its neural network and produce an answer that provides suggestions on how to deliver the information and through which methods the information should be delivered.
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 banking’s social media practices through scheduling, advertising and analysis.
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.
As for analysis, the AI will analyze data and provide insights on customer behavior, preferences and trends to provide actionable insights for creating a stronger strategy.
Risk management
Customers entrust 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 because of its massive data pool.
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What are some cons of using ChatGPT in the banking industry?
While ChatGPT can certainly be a considerable resource for the banking industry, there are certain drawbacks that banks should watch out for:
- Cost: While ChatGPT is free, the cost of implementing it into a banking system would not be. Banks must 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 it might not be accessible to smaller banks with a tighter budget.
- Security: OpenAI, the creator of ChatGPT, has taken immense measures to ensure the security and privacy of ChatGPT users. However, banks need to take their own course of action in addition to ChatGPT to safeguard the security of its users. This can be seen as an extra task and worry for banks, making the process less efficient.
- Limited human interaction: While automation certainly has its perks, it does reduce the need for human labor.
For people who prefer to speak with a human, it can be frustrating to go through many steps with artificial intelligence until the system allows them through. In addition to that, the implementation of AI means less need for humans, making the job market that much smaller.
- Technology dependence: Technology is an incredible tool, but there is never a whole substitute for humans. The reliance on ChatGPT can lead to dependencies that might cause oversights and blind decision-making that could result in mistakes on the bank’s part.
- AI limitations: While ChatGPT does have extensive uses, it does have its limitations. The AI program might not be able to understand the context of a situation or provide solutions to overly complex issues.
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 must verify accuracy.
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The future of ChatGPT in the banking industry
As the artificial intelligence program continues to evolve, it has continued potential to improve several aspects of the banking industry.
With customer service being a high priority, the ability to provide 24/7 assistance is something banks can use to set themselves apart 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 offer that service to its customers or if that information can help bankers make decisions, that is another huge advantage 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 gravitate toward it.
With artificial intelligence impossible to ignore, there are many future impacts ChatGPT can make in the banking industry.
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