ChatGPT exploded onto the scene at the beginning of 2023. NVDA, an AI company, just announced its earnings and pushed its market cap to nearly $1 trillion. The popularity of both is being driven by extreme excitement and interest in AI (artificial intelligence).
ChatGPT stands for "Chat Generative Pre-trained Transformer." That's quite a mouthful. Basically, it is a machine-learning model that falls under the umbrella of AI. ChatGPT lets anyone type in a natural language question and get a natural language response. Companies can also integrate ChatGPT technology into their systems. Some financial companies are already doing that.
ChatGPT will enhance services currently provided by the financial services marketplace. It is likely to provide new services that we haven't yet imagined. All are meant to help financial service providers accomplish more and provide richer information to their customers. Below are a few examples of where ChatGPT is being put to use.
Enhanced Chatbots
Chatbots have been used within the financial services industry for a few years. They took off during the pandemic when everyone had to remain home. Anyone who's tried a chatbot probably wasn't overly impressed with its abilities. It doesn't take long for the bot to start providing useless information.
The difference with ChatGPT is that it can analyze a massive amount of data quickly. It also gets better the more it is trained on specific data. All of that will help chatbots become more useful and accurate.
Fraud Detection
Many fraud detection systems already use AI. But systems like ChatGPT are continually involving and pushing out new technologies. This can offload some internal costs to build fraud detection systems, lowering overall costs while increasing efficiencies.
Replacing Advisers?
Robo-advisers aren't anything new. Many customers find them very useful. But they have limitations. While robo-advisers can provide generic financial help, they often fall short with specific or complex scenarios. ChatGPT can already help individuals with budgeting questions, general tax questions, and even building formulas in Excel.
Once ChatGPT starts integrating into robo-advisers, their use should increase greatly. However, it is still likely that human advisers will be needed to answer very specific questions and work with clients on complex scenarios.
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