Insights

6 ways ChatGPT is disrupting consumer banking

Author: Sajan Varghese

ChatGPT is a powerful tool helping businesses improve customer interactions and automate routine tasks. ChatGPT’s secret weapon is its use of “Generative Pre-trained Transformer,” a neural network architecture that allows it to generate language that sounds more human and less robotic. Its Large Language Models consume massive volumes of text and data from the internet and can predict the most likely sequence of words to respond to queries with relative accuracy. 

With 175 billion parameters, ChatGPT is already incredibly advanced, but the newly released GPT-4 takes it to a whole new level. With 100 trillion parameters, GPT-4 is able to understand sarcasm and idiomatic expressions and even create music and art. 

Since ChatGPT is trained using unsupervised learning techniques, it can learn from vast amounts of unstructured data without explicit labels. However, ChatGPT becomes even more useful and accurate when fine-tuned. Its ability to understand context and generate natural language responses makes it an ideal platform for conversational applications such as chatbots and virtual assistants. 

And that brings us to how ChatGPT is disrupting consumer banking. Banks can use ChatGPT to enhance the customer experience and streamline operational processes. Below I’ll share six potential use cases for ChatGPT in banking. 

1. Customer service chatbot

Chatbots have become increasingly popular in the banking industry, as they help to provide customers with real-time assistance. However, most chatbots have limited capabilities when it comes to handling complex issues and problem-solving and can come across sounding robotic.

ChatGPT can be fine-tuned to help banks and financial institutions streamline customer service interactions, handle more complex queries, and provide sophisticated, more human-like responses, while reducing the need for human intervention. By training chatbots on data such as historical customer interactions and banking-related information and applying data labels, ChatGPT can endow chatbots with a broader understanding of your bank’s products and brand voice, which can lead to better decision-making and personalized customer service interactions.

2. Personalized financial advice

ChatGPT can be used to provide personalized financial advice. By training ChatGPT on historical data, including customer interactions, transactions, and spending patterns, ChatGPT can recognize patterns and data correlations to advise customers on how to save and invest money or manage debt. It can also help customers navigate the banking system more efficiently. 

3. Chat-based money management

Similarly, ChatGPT can help customers manage their finances through a chat-based interface, allowing them to track expenses, create budgets, and receive alerts on their spending habits. For example, customers can ask questions like “How much did I spend on eating out last month?” or “What is my account balance?” and get quick responses to help them understand their purchasing habits and improve their financial health. 

4. Fraud detection and prevention

Fraud is a major problem that cost consumers $8.8 billion in 2022, representing a 40% increase over the year prior. ChatGPT has the potential to help detect and prevent fraud for banking customers. By analyzing customer transactions, ChatGPT can flag and alert customers to suspicious activities, such as large purchases or unusual login attempts, in real-time, helping to minimize and prevent fraudulent activities.

5. Loan application processing

ChatGPT can also be used to streamline the loan application process. For example, ChatGPT can be used to help customers understand and navigate required documentation, eligibility criteria, and interest rates, meeting their needs in real-time. ChatGPT can also analyze customer data to determine creditworthiness and provide an instant decision on their loan application. This makes the loan application process faster and more efficient, freeing up loan officers to focus on more complex tasks.

6. Automated investment management

Finally, ChatGPT can provide personalized investment advice based on a customer’s risk tolerance, investment goals, and financial situation. ChatGPT can analyze a customer’s investment portfolio and transaction history to surface recommendations. It can also be used to manage investments and rebalance portfolios based on market conditions.

Get started with ChatGPT

Overall, ChatGPT is disrupting consumer banking by enhancing customer experience, improving operational efficiency, and providing personalized financial services. Beyondsoft has years of implementing advanced AI solutions in the banking industry. We have helped clients transform the data and analytics value chain, enhance the customer experience, and improve Net Promoter Score using chatbots. Leverage our experience with ChatGPT for your next level of transformation.  To learn more about how we can help you put ChatGPT to use, contact us today.