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

There’s a ton of buzz about ChatGPT and the know-how’s potential for purposes in customer support, writing and analysis — particularly given the latest launch of GPT-4. It jogs my memory of the sooner days of synthetic intelligence (AI) and the joy round its potential. In numerous methods, the joy was well-earned and the predictions concerning the methods corporations may apply AI have been spot-on. Machine studying (ML) and AI are serving to to ship extra tailor-made suggestions for ecommerce, supplementing customer support groups with chatbots in locations like LinkedIn, and serving to us all keep somewhat safer on the street with lane steering and emergency braking.

However as with numerous improvements, a number of the hype went far beyond reality. Robots usually are not taking up within the classroom, and to my dismay are nonetheless not capable of tackle all of our extra handbook, tedious duties at house or within the workplace. AI has not ruined the classroom or changed the necessity for folks to construct product methods, design instruments and supply a human layer on high of these chatbots when extra complicated points come up.

So once I began studying the hype round ChatGPT, and now GPT-4, I used to be intrigued however skeptical.

After getting an opportunity to play with it, I’ll admit it’s spectacular. Simply final week, our CFO was enjoying round with it to assist present some context about our monetary projections, and it was fairly spot-on. There’s a ton of potential in the case of purposes of this know-how that I’m excited to see materialize.

That stated, we’re nonetheless a good distance from handing issues over to AI whereas all of us go sit on a seashore someplace.

In relation to monetary providers, there are nonetheless numerous issues neither ChatGPT nor GPT-4 can resolve, not less than not but. It’s because monetary merchandise include quite a lot of threat. Monetary establishments (FIs) are accountable not only for making certain the protection of their clients’ belongings, but additionally for assembly authorized obligations round know-your-customer (KYC) and anti-money laundering (AML) necessities. FIs even have a vested curiosity in minimizing threat and, consequently, fraud as a result of any misplaced funds can be subtracted from their backside line.  ChatGPT/GPT-4 aren’t but ready to satisfy these essential threat priorities. Right here’s why.  

1. Compliance checks 

Compliance is a essential a part of each monetary providers enterprise. Correctly, on condition that corporations are dealing with cash for customers and companies. AI can assist in the case of monitoring suspicious exercise. Nevertheless, to make sure compliance with confidence, corporations additionally want specialists to guage evolving guidelines, decide methods and oversee the compliance program to make sure corporations are assembly these necessities. 

2. Making credit score underwriting choices 

Information evaluation has lengthy been part of the credit score underwriting course of, however figuring out the precise insurance policies to make use of to tell what information goes into these choices requires human perception. FIs want to guage their threat priorities to find out what credit score thresholds are appropriate for his or her enterprise. Then, they’ll use credit score bureau information to guage if a buyer meets their credit score insurance policies.

3. Offering a seamless consumer expertise 

When opening an account, clients anticipate a seamless expertise that may be accomplished in 10 minutes or much less. To facilitate a frictionless course of with out rising their threat, FIs have relied on issues like phone-based id verification and doc verification, which may robotically confirm a buyer’s id primarily based on data they’ve entered in the course of the onboarding course of.

Nevertheless, when addressing points post-account opening, clients anticipate a extra immersive expertise. Although many FIs use chatbots to assist clients deal with primary inquiries, if a buyer suspects they might have been the sufferer of a social engineering rip-off, they anticipate to interact with a bank representative directly to report the issue.

4. Designing new monetary merchandise

Growing new monetary merchandise requires a deep understanding of market traits, buyer wants and the regulatory surroundings. It additionally includes making strategic choices that transcend what information alone can inform us. Whereas ChatGPT/GPT-4 can present insights and options primarily based on information evaluation, it can’t substitute the creativity and instinct of a human designer.

5. Dealing with a disaster like a fraud assault

Whereas ChatGPT/GPT-4 can assist with buyer interactions, fast questions, instructions to assist supplies, and paperwork when an organization is experiencing one thing like a high-velocity fraud assault, they need direct human experience to information them by means of the method. 

The identical goes for stopping fraud assaults. Fraud fashions are useful instruments, however to essentially transfer on the tempo of fraud, corporations want AI/ML groups to assist guarantee their insurance policies are up-to-date, they’ve the precise datasets in place, and they’re able to take a look at and make updates to their workflows to deal with assaults once they come up.

The way forward for ChatGPT and GPT-4

ChatGPT, GPT-4 and any future updates can be highly effective instruments that may assist monetary providers corporations in some ways. Nevertheless, these merchandise aren’t capable of substitute a number of the higher-touch, extra nuanced elements of working a monetary providers enterprise.

That stated, corporations which are capable of strike the precise stability between automation and human contact can be greatest positioned to realize long-term success by rapidly and constantly delivering worth to their clients.

Charles Hearn is a cofounder and the CTO at Alloy.