Against the backdrop of macroeconomic volatility—inflationary concerns, monetary tightening, supply chain disruptions, and COVID-19 after effects—and geopolitical uncertainties, the world has been thrown into a toss with the launch of ChatGPT. Understandably so, with individuals and businesses alike exploring how they can integrate this cutting-edge technology into their processes for enhanced operational efficiency and productivity.
Navigating Job Security Concerns
While open access to this text-based generative AI tool that could easily beat the celebrated Turing Test has electrified people’s imaginations, it has also raised apprehensions about the potential impact on companies’ headcount.
Open AI, the creator of ChatGPT, found in its study that at least 80% of workers could notice a 10% impact on their job tasks, with the number shooting up to 50% for around 19% of employees—with high-income jobs at a higher risk of role transformation and reevaluation.
With ChatGPT in conjunction with related AI-powered tools generating a massive revolution in speed, efficiency, and productivity, it is no surprise that some repetitive tasks are bound to be automated.
However, it is equally important to dispel the notion that it will come at the cost of massive worker displacement; after all, companies with a more productive workforce are better off than companies maintaining the same pre-AI productivity levels with fewer employees when compared in terms of output, innovation, and psychological safety.
Unleashing ChatGPT’s Potential
Goldman Sachs research suggests that the integration of natural language processing models, such as ChatGPT, could raise productivity by 1.5%, growing the global GDP by 7% ($7 trillion) over a 10-year period—which isn’t hard to fathom, considering its far-reaching impact on the education, software development, and financial sectors, to name a few.
Leveraging its generative capabilities with copilot AI tools, programmers have experienced an almost 56% surge in productivity, exhibiting its potential to accelerate software development by automating standardized tasks. Moreover, ChatGPT models conducting headline-based sentiment analysis outperform the quantitative strategies followed by hedge funds, generating better predictions and investment results.
Indeed, by being integrated into several business applications, generative AI holds the potential to enhance worker efficiency, improve patient diagnosis and drug development, better cyber fraud detection, and, most of all, democratize credit.
ChatGPT Powering the Next Financial Revolution
Over the past decade, the financial industry has undergone a monumental transformation with the advent of fintech companies leveraging AI/ML models and offering innovative, end-to-end digital solutions.
Even Karza Technologies, the representative of the trifecta of automation, due diligence, and robust decision-making, has automated banking processes and improved risk management practices with its API stack. Its cognitive digital solutions, spanning banking, lending, insurance, and investments, have reduced underwriting and onboarding costs for its clients by over 70%, yielding 7x growth and fraud-proofing to the extent of over $325 million.
ChatGPT will take this one step further, or rather leapfrog multiple steps, heralding new business opportunities and enhancing operational efficiencies.
Improve Loan Origination: By drawing on ChatGPT’s deep learning capabilities, financial institutions can make the loan origination process simpler and more seamless. The NLP model can facilitate lenders in data collection, piecing together information from multiple sources, and automating risk assessment—a boon for over 80% of AI-driven fintechs that lack the scale of data to train their models. It can also provide end customers with real-time guidance throughout the loan application process.
Upgrade AML Compliance: The integration of ChatGPT into proprietary software can enable banks to improve their due diligence and ensure proper regulatory compliance with anti-money laundering (AML) rules. Open AI’s brainchild automates transaction monitoring, customer identification, and background checks and may even compare customer data against sanction lists to flag suspicious accounts. It optimizes alert thresholds and provides scalable compliance solutions that eliminate the need for manual intervention, resulting in time savings.
Enhance Customer Onboarding: Generative AI models can expedite the customer journey by automating onboarding processes, engaging with and assisting potential customers with filling out applications, addressing concerns, and guiding them through the setup process in real time. Likewise, they enable banks to verify customer data and highlight areas demanding clarification.
Better Risk Management: As advanced AI models are capable of quickly analyzing huge transaction datasets, they can detect and flag suspicious customer activity. This helps financial institutions better protect their financial assets against fraud and reduce losses. Banks can also use this model’s capabilities to screen for potential political, economic, and market risks that may put their operations at risk.
Superior Customer Service: LLM-based chatbots improve deflection rates—the proportion of help requests managed by self-help tools instead of a human agent—by automating the answers to repetitive customer exchanges. Moreover, their multi-lingual capabilities enable the provision of localized assistance, underscoring their tremendous value. Additionally, banks can provide prompt, 24×7 bot support that addresses customer queries and furnishes personalized information efficiently and at stellar speeds.
Democratize IT processes: By incorporating ChatGPT into their systems, firms can make their business models more agile. Not only is it easier to write, train, and finetune the model with the code writer and interpretation tool, but its ability to source massive amounts of data surpasses developer knowledge, resulting in better model-making. Besides, generative AI has the capability to convert code, easing the digital transformation of legacy systems.
All-in-all, by embracing the capabilities of ChatGPT, banks, fintechs, and other financial institutions can unlock diverse growth opportunities, innovate better, drive process efficiencies, and accelerate the pace of financial inclusion further.
Bridging the Gap with ChatGPT
Financial inclusion—the provision of useful, affordable, and accessible financial services, including savings, insurance, payments, transactions, and credit—continues to be a pressing challenge. The UK Sinha Committee reports that MSMEs face a credit gap of Rs. 20-25 trillion.
While fintechs have been disrupting the lending ecosystem by catering to new-to-credit (NTC) customers and deepening credit penetration in non-metro cities, their share continues to be minuscule vis-à-vis traditional lenders in terms of asset-backed loans.
However, they are increasingly catering to borrowers with poor credit histories, owing to their utilization of alternate data sources, which improve the determination of the customer’s creditworthiness—a process that can be further revolutionized by Chat GPT.
Additionally, by leveraging the conversational capabilities of ChatGPT, financial institutions can reach out to the underbanked and underserved, providing accessible financial services and simplifying complex financial concepts in their preferred languages.
With a fintech adoption rate of 87% against the global average of 64%, India is already at the forefront of the battle for financial inclusion; the integration of ChatGPT and other adoptive AI technologies will embolden our journeys even more.
Collaborative Synergy for a More Inclusive Financial Future
ChatGPT’s integration across the systems paints a nuanced picture where it is more likely to offer collaborative synergies by augmenting worker productivity and capability instead of out-competing them en masse.
By automating routine and repetitive tasks, generative AI enables individuals to focus on higher-order tasks, fueling the growth of critical thinking and innovation. Similarly, financial institutions can leverage ChatGPT to improve their processes and drive forward the cause of financial inclusion, creating an India that is credit-inclusive and prosperous.
Article by: Alok Kumar
Alok is an IIT Kharagpur alumnus and is the co-founder and CTO at Karza Technologies (a Perfios company), a state of the art banking and business intelligence solution provider, set out to create cutting-edge products that empower lending institutions and corporations with cloud based solutions for informed and intelligent decisions. He was featured in the Fortune 40 Under 40 as India’s Brightest Young Minds.
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