How will Chat GPT affect the finance sector?

7 min read

What is the GPT chat that everyone is talking about?

Chat GPT stands for:

Chat Generative Pre-Trained Transformer is an AI chatbot created by open AI.

That is experiencing a human-like conversation that uses "NPL" natural language processing and "ML" machine learning, which make it able to understand users' questions and respond to them. Also, it can assist users with tasks like scheduling, coding, and data analysis, with different sources of data like textbooks, articles, and websites,

After knowing about Chat GPT, of course, you wondered how that will affect our lives?

This chatbot will make lots of jobs simple and easier, like programming and essay writing. Also, it will affect normal people's lives in daily activities like scheduling appointments or meetings and searching for information meetings,

Also, the education department, as students might use it to do their school assignments.

What can GPT chat do?

Many people may think when hearing ChatGPT that it is just a modern technique for doing routine tasks and may not feel its other advantages, in addition to its ability to answer questions and do tasks, it may be distinguished over other technologies by its ability to create and produce creative ideas such as writing music, as well as its ability to deal with feelings and give advice in relationships, in contrast to other AI technologies It cannot cope with these tasks.

How does chat GPT help in the financial field?

It offers a wide range of possible uses in banking and finance, Such as faster data processing and faster aggregation of many different types of information into practical and concise summaries.

Examples of how we can use Chat GPT in the financial sector:

1. Investment prediction and analysis:

To make investment decisions, analysts might use ChatGPT to examine financial statements and other data. Also, ChatGPT can assist in spotting market data trends and patterns that could otherwise go unnoticed. Because of how swiftly ChatGPT operates, it can complete this task considerably more quickly than a person.

2. Entry and analysis of data:

Data entry into Excel models using ChatGPT can be programmed to occur automatically. This potentially leads to saving a significant amount of time and minimizes the chance of errors in models. Large datasets can be analyzed with ChatGPT to discover patterns that are difficult to see with typical analysis techniques. It can immediately spot trends and patterns through its training in handling data, which can help with making financial modelling and decision-making.

3. Recognizing key variables:

ChatGPT can assist in determining which factors are most essential to financial models. The model can be improved by determining which factors have the greatest influence through training and conversational analysis of the outcomes.

4. Predicting:

By using historical data to train ChatGPT and predict future patterns, it is possible to produce more accurate financial forecasts. Theoretically, a business might make better financial model decisions by using ChatGPT to find patterns and correlations in data.

the future of the finance sector with Chat GPT

A few areas where ChatGPT can be of use in the finance sector includes:

1. Customer service:

When it comes to customer service, real-time chatbot support can be provided by banks using ChatGPT, improving customer experience and satisfaction. ChatGPT's Natural Language Processing (NLP) capabilities enable it to respond with precision quickly, and efficiently to customer inquiries, complaints, and requests for information. It is impossible for chatbots to become fatigued, bored, or distracted, unlike humans. Therefore, they can maintain a high quality of service for longer periods. This characteristic especially comes in handy when responding to repeated or common inquiries. Chatgpt will respond quickly and accurately without the need for HR in this area.

2. Fraud detection:

The Consumer Sentinel Network, an investigative cyber tool that allows its members access to millions of reports, received 2.4 million fraud reports in 2022. With ChatGPT, large amounts of transaction data, as well as, suspicious patterns of transactions can be analyzed, hence, detecting and preventing fraud. This can notify security professionals at the bank of suspicious activity and help banks protect their customer’s financial assets and reduce losses due to fraud.

3. Cost savings

Chat GPT can aid in reducing the costs associated with manual labor and hiring new employees, hence, saving the company money. By empowering current employees to do more, Chat GPT can increase employee productivity. Moreover, it offers tailored services through data analysis and personalized recommendations, which may improve consumer satisfaction and loyalty.

4. Financial Planning

Financial planning services are frequently provided by banks, and this is another excellent use for ChatGPT. The concept can be used by banks to offer individualized financial planning services, such as retirement planning, debt management, and budgeting.

Glenn Hopper, a chief financial officer at Sandline Global, devoted time to his project of importing three years' worth of financial statements into a simple database and building code using ChatGPT to analyze the financial statements to find patterns, correlations, and data discrepancies. He aimed to introduce and demonstrate the feasibility of ChatGPT and other AI technologies in the field of Financial Planning and Analysis (FP&A) by keeping the analysis straightforward. The project goals were successfully met, with Python scripts used to extract and analyze the data, create financial ratios, identify variances, and make forecasts. He was even able to demonstrate how financial professionals with minimal programming skills could utilize the potential of AI to construct useful solutions for Financial Planning and Analysis (FP&A) tasks by using ChatGPT to write all structured query language (SQL) queries and Python code based on prompts.

Below is an example of how ChatGPT, provides aid in portfolio allocation when asked to create a model portfolio for a 73-year-old homeowner with no heirs, moderate risk aversion, and 3.5 million riyals to invest.

What are the disadvantages of ChatGPT that the finance sector may face?

With the ongoing technological innovations and the rise of AI ChatGPT, we are quickly revolutionizing how we work, play, and communicate. We have been given solid proof that ChatGPT has many advantages for its users; However, is that always true?

1. The ability of Chat GPT to eliminate jobs:

According to Khoury, ChatGPT will probably replace employees who are tasked with performing mundane, repetitive tasks that can be automated. To increase their employability in a digital environment that is becoming more and more AI-enabled, workers must learn new skills through retraining or upskilling.

Envision a Contact Center with 100 personnel who assist customers with queries and problem-solving. If Chat GPT can divert 20% of incoming calls by responding to them with an online chatbot that's genuinely helpful, you'll require 20 fewer Contact Center staff. Calls that couldn't be diverted are being answered by the contact centre's 80 remaining staff members. They employ a customized internal Chat GPT application that has been trained on business policies and processes. Instead of putting customers on hold or moving them to another department as a consumer is asking inquiries, they are referring to Chat GPT. This could result in the elimination of some administrative positions, 50% of the department specialists, and 20% more jobs at call centers because it allows them to handle more calls per day.

Overall, a Chat GPT-style solution increases efficiency to the point where the Contact Center may operate with 50% fewer workers while yet providing the same or higher level of service.

2. Bias in AI

ChatGPT is excellent at obtaining information from conversations by providing advice and providing answers to queries. Its responses, meanwhile, aren't always accurate. The bot can offer inaccurate information or simply something difficult to verify. Bias is an illustration of the unforeseen consequences that result from depending on ChatGPT technology in its current condition. According to Bloomberg, there have been major instances of Inappropriate content being written by ChatGPT. Users asked for the biased content to make a point: that AI learns and makes assumptions in ways that benefit some, at the expense of others. The industry is still far from finding a genuine solution to bias in AI.

3. Null buy-in

Every technology used may be doomed to failure if important stakeholders don't support automation. It is unlikely to be adopted in the first place if individuals at the top (such as important decision-makers and investors) are not on board. Also, employees who worry about losing their jobs might not be inspired to adopt or use it well. The early opportunity to achieve popular acceptance is crucial.

4. Privacy

Some of the most important personal data, including account numbers, user addresses, Social Security numbers, and other crucial data, are held by the financial sector. Plans for data protection would need to be in place before a technology like ChatGPT could be widely implemented. Not only is this the morally right thing to do, but it is also what the law demands.

So as discussed, a wave of change in the global workforce has been brought about by ChatGPT and other artificial intelligence platforms, which may prove to be a valuable tool for Saudi Arabia's workforce to support economic growth.

Kaspersky found that 48% of workers in the Kingdom worry about losing their employment to AI. Nevertheless, a senior partner, at Arthur D. Little, Raymond Khoury dismissed these fears in an exclusive conversation with Arab News by providing some insights on the positive effects of ChatGPT and AI.

“Looking at career-related skills from a talent management perspective, AI, specifically ChatGPT, can positively impact recruitment and hiring, training and development, upskilling and reskilling, talent collaboration as well as knowledge management,” he said.

Moreover, Khoury believes that ChatGPT and AI will probably have an impact on the Kingdom's workforce, altering and perhaps even empowering it in the long run. The workforce will operate more effectively and productively inside the corresponding business as more routine and repetitive tasks are automated, giving employees more time to concentrate on strategic pursuits.