ChatGPT has taken the world by storm, but crucial that fintechs take a responsible and ethical approach to its development and implementation.
In a matter of weeks, generative AI has gone from ‘fun chatbot’ to ‘potential business gamechanger’.
#HustleGPT is trending on Twitter, kickstarted by Jackson Greathouse Fall in mid-March when he gave ChatGPT a $100 budget and asked it to start a business.
Thousands of entrepreneurs have joined in, building micro-businesses where every decision is made by generative AI.
Fintech is embracing this trend too, with Klarna last week launching a ChatGPT plugin that helps the generative AI not only pull in recommendations for say, a new pair headphones, but also lets you buy them with only a few clicks.
It’s not a stretch to imagine a whole new generation of financial robo-advisors are already being worked on, using generative AI to develop investment portfolios that are bespoke for each customer.
Indeed our colleagues over at ETF Stream have already used ChatGPT to devise ETF portfolios that stack up reasonably well against those chosen by professional wealth managers.
Or how about a financial planning app that can offer tailored savings advice for someone dealing with debt or gambling addiction?
The possibilities are endless and there are undoubtedly hundreds of employees at various banks and fintechs starting to tinker with this new technology.
There is, of course, a ‘but’.
Recent reports have highlighted the lack of transparency surrounding the use of AI in financial services.
Fraud detection, risk assessments, credit underwriting and cybersecurity are just a few examples of areas that have already been partly or fully passed over to automated processes in recent years.
The issue is that much of this has been done with little transparency or explanation to the customer.
Benchmarking firm Evident published research this week on the usage and adoption of AI among 23 global banks including JP Morgan Chase, HSBC and Deutsche Bank, raising significant concerns.
It found eight of the largest banks in North America and Europe had no publicly available responsible AI principles in place.
“Our research found a worrying lack of transparency around how AI is already used – and how it may be used in the future – which could damage stakeholder trust and stifle progress,” said Alexandra Mousavizadeh, CEO and co-founder of Evident.
Generative AI is finally shining a light on the kind of automation which has been used for quite some time now within financial services, quietly, under the surface and with little scrutiny.
If fintechs and financial services are to successfully embrace the next generation of generative AI, it must be done transparently and responsibly.
This means establishing clear guidelines and principles for its use, ensuring that the technology is not used to discriminate against certain groups or perpetuate bias.
As generative AI becomes increasingly part of financial services, it's crucial that the industry takes a responsible and ethical approach to its development and implementation.
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