5 things ChatGPT (and GPT-4) can’t solve for financial services… yet

There is a lot of talk about ChatGPT and its potential applications in customer service, writing, and research. Especially given the recent release of GPT-4. A reminder of the early days of artificial intelligence (AI) and the excitement surrounding its potential. In many ways, the excitement was well-earned and the predictions about how companies could apply AI were spot on. Machine learning (ML) and AI are powering customized recommendations for ecommerce, powering chatbots for customer service teams in places like LinkedIn, and making roads a little safer with lane guidance and emergency braking. helps keep it.

But like many innovations, some of the hype was far beyond reality. Robots will not take over the classroom. Unfortunately, robots are still unable to take over all the more manual and tedious tasks at home and in the office. AI is messing up classrooms, building product strategies when more complex problems arise, designing tools, and the need to provide a human layer on top of those chatbots. It didn’t replace me.

So when I started reading the hype about ChatGPT and now GPT-4, I was intrigued but skeptical.

After actually playing it, I admit it was impressive. Just last week, her CFO at our company was playing with it to provide some background information on our financial projections, and it was pretty spot on. There are many possibilities for the application of this technology, and I look forward to realizing them.

That said, while we’re all sitting on the beach somewhere, it’s still a long way from handing things over to AI.

When it comes to financial services, both ChatGPT and GPT-4 have a lot to do, at least not yet. This is because financial products carry a lot of risk. Financial Institutions (FIs) are not only responsible for ensuring the safety of their customers’ assets, they are also responsible for meeting legal obligations regarding Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements. Financial institutions also have a vested interest in minimizing risk, resulting in fraud as lost funds are deducted from earnings. ChatGPT/GPT-4 is not prepared to meet these critical risk priorities. Here’s why:

1. Compliance check

Compliance is an important part of any financial services business. It makes sense given that businesses handle money for consumers and businesses. AI can help when it comes to monitoring suspicious activity. However, to ensure compliance with confidence, companies also have experts who assess evolving rules, determine strategies, and oversee compliance programs to ensure companies meet these requirements. I need it.

2. Credit screening decision

Data analysis has long been part of the credit underwriting process, but human insight is needed to determine the right policies to use to inform which data to use in that decision. Financial institutions must assess risk priorities to determine credit thresholds that are appropriate for their business. Credit bureau data can then be used to assess whether the customer is meeting the credit policy.

3. Provide a seamless user experience

When opening an account, customers expect a seamless experience that can be completed in 10 minutes or less. To facilitate a frictionless process without increasing risk, financial institutions have relied on things like phone-based identity verification and document verification. These features can automatically verify a customer’s identity based on the information they provide during the onboarding process.

However, customers expect a more immersive experience when dealing with issues after opening an account. Many of her FIs use chatbots to help customers respond to basic inquiries, but if a customer suspects they may be victims of social her engineering fraud, the bank’s We expect you to contact the person in charge directly and report the problem.

4. Designing new financial products

Developing new financial products requires a deep understanding of market trends, customer needs and the regulatory environment. It also requires strategic decisions that data alone cannot convey. ChatGPT/GPT-4 can provide insights and suggestions based on data analysis, but cannot replace the creativity and intuition of human designers.

5. Dealing with crises like fraud attacks

ChatGPT/GPT-4 can help with customer interactions, simple questions, directions to support materials, documentation if a company is facing something like a high-speed fraud attack, but the process We hope to guide direct human expertise through

The same is true for fraud attack prevention. Fraud models are useful tools, but to keep up with the pace of fraud in practice, AI / ML team required. Update your workflows to deal with attacks as they occur.

The future of ChatGPT and GPT-4

ChatGPT, GPT-4, and future updates are powerful tools that can help financial services companies in many ways. However, these products cannot replace some of the more sensitive and nuanced parts of running a financial services business.

That said, businesses that can strike the right balance between automation and human touch are best positioned to achieve long-term success by delivering value to their customers quickly and consistently. can stand.

Charles Hearn is Co-Founder and CTO of Alloy..