Shulou(Shulou.com)11/24 Report--

According to foreign media reports on February 5, the currently popular AI chat robot ChatGPT will be used to improve productivity and improve existing tools. ChatGPT will affect a number of industries and play a key role in financial services, and Wall Street seems to be no exception.

Since AI research company OpenAI launched ChatGPT in November 2022, the chat robot has been the focus of public attention. Microsoft announced a $10 billion investment in OpenAI in its latest round of financing at the end of January, which allegedly valued the start-up at $29 billion.

ChatGPT can use generative artificial intelligence (CIGC) to recognize and imitate human speech patterns and generate conversational written responses to user questions. From writing a large number of essays that are grammatically correct but lacking substance, to giving reasonable advice on how to negotiate a pay rise, playing chatbot has become an interesting pastime, but people are also beginning to reflect on its possible impact on many industries.

It may be too early to talk about these effects, but experts have predicted that ChatGPT and its underlying technologies will be used as financial tools to help increase productivity. "ChatGPT will automate the common tasks that knowledge workers do today so that they can focus on more valuable tasks," says Dylan Dylan Roberts, partner and head of KPMG.

There is a view that ChatGPT will eventually be able to replace some human roles, but the timing of achieving this goal is in the hands of customers. "the technology will be able to do this," said Peter-Jan Van de Venn, vice president of global digital banking at Mobiquity, a consultancy. "the question is, does the customer accept it or not?"

However, there is at least one problem with the application of ChatGPT in the financial field. Charles Hearn, chief technology officer of Alloy, a financial technology company, said the product was a "black box", meaning artificial intelligence could give answers without having to track how it got them. This process may make it difficult to meet some of the regulatory requirements of the financial services industry.

Others are sceptical about ChatGPT's ability to revolutionize the financial industry and whether it will become a white-collar Terminator. According to reports, a professor at Princeton University even called the chatbot "bullshit generator".

But Dev Patnaik, chief executive of Jump Associates, a strategy and innovation company, says it is clearly a mistake to abandon a tool like ChatGPT so soon. "it's like you're using all your brainpower to list the reasons why it won't happen in the future, rather than thinking and reasoning about what you should do when it happens," he said. "

But when you think about whether you should focus on the impact of ChatGPT on Wall Street, some people are already making the technology work. In Sweden, private equity giant EQT,ChatGPT is beefing up its seven-year-old AI platform.

Alexandra Lutz, head of EQT AI platform MotherBrain, said: "now, we can not only introduce the idea and meaning of ChatGPT, but also provide examples for senior leadership and portfolio companies to help them understand that this is not hype, but what really happened. You have a lot of ways to use it, and you can start using it tomorrow."

BI, the mainstream online media in the United States, interviewed five industry experts to understand their views on how ChatGPT and its basic technologies are applied to various fields of financial services.

1. Roberts, a partner in investment banking and dealmaking KPMG, says ChatGPT could be a powerful research tool in investment banking. AI can collect and analyze large amounts of customer data and make recommendations, such as identifying companies that need to raise money or are likely to be acquired.

Lutz said that at private equity giant EQT,ChatGPT is changing the way it looks for potential deals, from venture capital to additional acquisitions of existing portfolio companies. "We firmly believe that algorithms and machines will not replace humans," she added. we just think that people who have algorithms will be more competitive than those who don't. "

By the end of this year, the deal team will provide attributes of the type of company they want to invest in or acquire, including size, location and industry, Lutz said. The information will be passed on to Lutz's team, who will then enter these attributes into MotherBrain, which will be applied to a database that contains hundreds of millions of data points about companies, people, and their connections.

MotherBrain will make a list of potential companies, while other teams will provide feedback on why the companies on the list are suitable for investment or acquisition. Lutz's team will bring the results back to MotherBrain to restart the new screening process.

With ChatGPT,EQT 's trading team and portfolio companies, they can interact directly with MotherBrain, rather than through Lutz's team. They can ask more open questions and more complex requirements, such as an in-depth understanding of companies that use specific types of technology.

Customer service Roberts believes that customer service chatbots are the most obvious help for ChatGPT because they can provide more empathetic and human-like interactions.

In the early chatbots, customers needed to quickly complete multiple choices that best described the problems they encountered, but were eventually redirected to human representatives. ChatGPT may recommend customers to people to solve problems with more efficiency and fewer choices. But whether ChatGPT can do well enough to eliminate human jobs remains to be seen.

Contact center staff can also use ChatGPT as a productivity tool to retrieve customer data faster, thereby reducing company operating costs and customer waiting times.

Wealth Management and Financial Planning BI asked ChatGPT to explain Warren Buffett's investment strategy and how to invest during a recession. ChatGPT has done a good job, showing the potential to identify investment strategies and make investment recommendations based on its analysis.

ChatGPT may also be used to act as a "financial manager" to enhance the personal financial function of consumer-oriented financial technology. 'in many applications, presenting a customer's financial situation in an easy-to-understand way is a weakness, 'said Mr. Hearn, chief technology officer of financial technology company Alloy.

Mr Hearn says: "anyone can have a personal financial manager driven by an ChatGPT or similar tool and he will ask, 'how much can I spend? how much disposable income do I have?' I don't think we have unlocked such features in the financial services industry, but they can be very powerful for people."

4. Cyber security and fraudulent identity decision-making is not only a key behind-the-scenes function in the financial field, but also another area where ChatGPT can help. The company can verify the identity of the customer by cross-checking the billing address or comparing records such as the location of the usual transaction.

"if we can pass on enough information to banks, we can pass on enough information to machine learning models like ChatGPT," Hearn said.

But some companies, such as Microsoft and Amazon, warn their employees not to provide sensitive information to chatbots, including personally identifiable information that is critical to identity decision-making. they are concerned that the data may be used in future models or shared with other users.

5. Personal banking ChatGPT can be used to enhance the personalization of digital banking, so as to improve customer experience and benefit banks. Mobiquity's Van de Venn called it a "win-win" situation.

"Banks already have personalized customer records, but these records are mainly rule-based and tailored to certain market segments," Van de Venn said. Banks can use ChatGPT to provide tailored product recommendations based on customers' previous transactions, portfolios or social data. "

This doesn't just mean working with existing customers, the personalization that ChatGPT can provide will also be a key tool for transforming sales.

"similarly, ChatGPT can help customers make bank inquiries in real time during onboarding or product launch, providing them with personalized solutions according to their specific needs," Van de Venn said. this will increase the customer experience and lead to higher product conversion rates.

6. Stock Trading No one in the experts interviewed by BI discussed the potential use of ChatGPT for stock trading.

This is not to say that stock trading will not be affected by ChatGPT. Instead, 53 per cent of traders think AI or machine learning will have the biggest impact on trading over the next three years, according to a survey by JPMorgan.

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