10 Ways ChatGPT can be used in the Finance industry

ChatGPT is already transforming education, programming, digital marketing, and other industries. Large language models (LLMs) paired with other AI systems have human-like intelligence, a clear upgrade from previous technologies.

However, the technology is even affecting the finance sector. Banks, insurers, brokers, fintech firms, and building societies can all benefit from this new development. But how?

That’s the topic of this post. We explore ten ways to use ChatGPT if your business is in finance. You’ll discover why the tool is powerful and how it can transform your operations.

But first, a word of caution: avoid relying on ChatGPT 100 per cent in any context that involves dealing with other people’s money. While the technology is undoubtedly impressive, it is still flawed and can “hallucinate” responses or simply fail to understand basic logic. Using it uncritically in some contexts could lead to compliance violations.

With that caveat in mind, let’s look at the ten ways you can use ChatGPT in your finance enterprise.

Generating reports

Writing reports by hand can take a long time. Finance firms employ teams of people to do it.

However, ChatGPT lets you automate this process to a certain degree. The tool can transform structured data into words, bypassing the need to use complicated tools, like Power BI, to create quick presentations. Simply cut and paste the facts or data into the prompt box and provide the AI with instructions for what you want it to do with it.

Create training simulations

Building on this, you can also use ChatGPT to create training simulations. Again, all you need to do is input the data and tell the software you want to use the information you provide to create a training environment.

For example, you could use ChatGPT to train new analysts. Instead of using live or confidential data, you could enter dummy data and get the tool to create various questions or exercises. You could also teach new analysts how to correctly prompt the system to generate useful or pedagogically helpful examples.

Generate more clarity in your organisation

Another use of ChatGPT is to generate more clarity in your organisation. Because it is primarily a language-based tool, the AI is adept at translating financial jargon into understandable language.

For instance, a colleague could say to you that “the economy is facing long-tail risks which are making markets unstable.” Asking ChatGPT what this means, it might say:

“In practical terms, your colleague is suggesting that there are unusual or unexpected risks in the economy that have the potential to disrupt normal economic activities and create uncertainty in financial markets. These risks may not have been fully anticipated or priced into market valuations, and as a result, they are contributing to market instability.”

Create forecasting narratives

You can also use ChatGPT to create forecasting narratives. While the tool can’t predict future events (because its data training only went up to September 2021), it can leverage prompt data and create a story from it.

For example, let’s say your firm has data on consumer spending and mortgage repayments. You can feed these variables into ChatGPT and it will use new and existing knowledge to explain what will likely happen in the future. Then, you can use this information to explore further and see whether current mortgage lending is sustainable.

Reply to customers automatically

Another exciting application of ChatGPT is its ability to improve chatbot software. Previous-generation chatbots relied on structured conversations and heavy programming. However, a ChatGPT-based version could answer more questions without additional manual work.

For example, your business could use the technology to build a chatbot to reply to customers automatically and have conversations with them. Users could ask any question they wanted and get meaningful responses. Bots would be available twenty-four-seven, reducing labour costs significantly.

Automatic financial news brief generation

You can also feed recent news articles into ChatGPT and tell it to create a brief summarising the key points. These tools can help busy traders save time and get up to speed with the market situation early in the morning.

For example, you might cut and paste the URLs of several stories you don’t have time to read into the prompt and instruct ChatGPT to summarise them into a bullet-point brief.

Create investment summaries

Related to this last concept, you can also use ChatGPT to create investment summaries, telling clients how their money grew over the month, quarter, or year. Again, the process is the same as before. You provide ChatGPT with the instruction that you would like it to create a client investment summary and feed in the relevant financial data.

Answering questions

You can also use ChatGPT to answer questions based on inputted data. For example, you could feed it your company balance sheet and ask, “What was the depreciation over the last year?” or “What free cash does the company have available this month?”

Be careful which questions you ask, though. ChatGPT can sometimes provide incorrect answers to technical questions or those requiring multiple reasoning steps.

Improve interactive data analysis

Your financial firm can also use ChatGPT to interact with data creatively. As before, you can provide it with data and then ask it to create charts, tables or other metrics based on the inputs.

For instance, you might say something like:

“I am providing you with the price histories of two stocks and other metrics, such as the P/E ratio. Which combination of stocks will offer the lowest risk-adjusted returns for a hypothetical client?”

Analysing text data

Finally, you can use ChatGPT’s word-crunching abilities to process vast volumes of text to gain market insights. For example, traders can cut and paste (or link to) various social media posts, articles, and reports and get ChatGPT to bring it all together and make insights. The output would be a distillation of the content fed into the system, providing you with a fast and accurate summary.