Could AI Like ChatGPT Replace Certain Financial Functions?

ChatGPT is an AI-powered, open-source chatbot that has been taking the tech world by storm. Used for more than just chatbots, ChatGPT can mine information from trillions of data points using artificial intelligence. 

Although the finance industry can benefit greatly from artificial intelligence, CFOs believe AIs will never entirely replace human-centric decision-making. 

Where Do AIs Excel?

Perhaps the most significant advantage of artificial intelligence comes from collecting data but also the correct data. Artificial intelligence uses machine learning and deep learning to help parse the right data points for what you need.

Finding Data Based on Criteria

Artificial intelligence software is great at choosing data based on criteria set by the program’s users. For example, administrators can set parameters for finding fraudulent activity. Think about a certain amount of cash suddenly entering or leaving an account or higher-than-normal transactions over a period of time to find money laundering tactics.

However, artificial intelligence cannot decide if these activities are actually fraud. That’s for financial regulators at banks to determine. The good news is that artificial intelligence can make your decisions more robust. 

U.S. Bank utilizes artificial intelligence to detect money laundering. Since implementing the analytics software, the financial institution has doubled the output compared to the prior system. AI can find patterns in previous cases to possibly predict future fraudulent activities before they start.

Another aspect of fraud detection comes from false positives. When a false positive triggers a response, staffers at a bank take action until they determine it wasn’t really fraud. Artificial intelligence reduces false positives by better than half in some cases, like for Danske Bank in Denmark, which saw a reduction in false positives by 60%.

When your bank improves fraud detection with the right software, you can achieve a higher standard of regulatory compliance.

You can extend the same type of software that detects fraud to one that helps your team make loan and credit decisions. Artificial intelligence can parse hundreds of data points that go beyond credit history, credit scores, references, and transactions. AI could go beyond the numbers and look at a prospective customer’s financial behavior, especially if they have a limited credit history. Did the person spend money frivolously instead of saving? Would a customer default on a loan? AI can help you make more accurate decisions on lending and creditworthiness, but it can’t make that final decision for you.

Performing Repetitive Tasks

Artificial intelligence is also outstanding at performing repetitive tasks. Financial institutions may see thousands or even millions of transactions a day. Machine learning and deep learning can help alleviate middle-office tasks using rule-based tasks. Think about data entry from contracts and forms, natural language processing, and handwriting recognition. A specialized form of AI, called robotic process automation, can help reduce operational costs by having staffers focus on higher-level tasks.

Software, once perfected, reduces human errors that come from performing repetitive tasks. Transcriptions, form copying, and examinations can take much less time and be more accurate.

Balancing Analytics & Human Thinking

The key to artificial intelligence is to help it give you as accurate information as possible, but humans should have the final authority. AI is only as good as the data it collects and the criteria it is presented with. You’ll need to vet the right machine-learning system that meets your specific needs. 

While ChatGPT is a well-known AI, it’s not necessarily the one you need to invest in. There are several software programs that use AI, and every one has different capabilities. The AI you choose should give you robust numbers and analytics from many data points while allowing you to customize the data collection process.  

However, your artificial intelligence software provider should never wholly replace human decision-making. You can use AI to make your decisions easier. You and your team’s expertise still have the final say because you’re qualified to decide, and that’s why people at financial institutions were hired to do their jobs.

Don’t Forget to Add Human Insights to Your Numbers

All of the numbers you collect mean nothing without a human interpreting them. That’s true for banks and financial institutions that see millions of data points every day. Artificial intelligence can help your staff make decisions.

The advisors at The Whitlock Co. can help your community bank with IT exams, interest rate risk reviews, and loan reviews. Contact us or call (417) 881-0145 for more information on our advising services for community banks.


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