PERSONAL TOUCH: There will always be a need for a personal, nuanced approach to financial advice that a robot can not replicate. Picture: SUPPLIED
The first ever chatbot was created in 1966 by MIT computer scientist Joseph Weizenbaum. The programme was the first to allow some kind of plausible interaction between human and machine. Artificial intelligence in financial services is nothing new, AI-powered chatbots have been incorporated into websites to assist with customer service since 2008. AI uses machine learning algorithms that can analyse large amounts of data and detect patterns and anomalies, enabling financial organisations to detect and address potential risks before they become a problem. AI can also be used in portfolio management, fraud detection and credit scoring. In banking it is used to send timely notifications for transactional updates, payment reminders and product offerings. Overall, AI is helping financial institutions become more efficient, customer-centric and profitable.
There is currently a race in Big Tech between Apple, Google, Amazon and Meta as to who will have the best AI assistant. However, the race is being led by Open AI developed and Microsoft backed, Chat GPT. The natural language processing tool driven by AI technology that allows you to have human-like conversations with a chatbot. Chat GPT does not source answers from the internet in real time, instead it scours its 570GB of stored books, articles, journals and other texts to formulate a response appropriate for the question asked. So, the question is – will this type of technology outsource expertise previously provided by financial advisers to artificially intelligent chatbots?
There are a few shortcomings that need to be highlighted. The data used by Chat GPT is limited to 2021, so any questions pertaining to post 2021 news and events are limited. It also does not provide sources for its responses and may provide harmful instructions or biased content. The questions directed to Chat GPT need to be specific otherwise responses may be too generalised. In my experience the servers may become overloaded and unable to handle requests. To gain access to the full Chat GPT experience you will have to pay a monthly subscription of R350.
If you are inclined to use this piece of AI for financial advice, be aware that it cannot fully comprehend the intricacies of human language and conversation. Financial advice is nuanced and catered to each individual rather than a “one size fits all approach”. Responses from AI technology should be used as recommendations rather than advice as there is no transparency about how these tools make their decisions or conclusions. Chat GPT and other AI should be used as a tool to supplement your own judgement but not as a replacement.
In conclusion, it is unlikely that AI will replace human advisers as there will always be a need for a personal, nuanced approach to financial advice that a robot can just not replicate. It requires a human touch that relies on empathy, intuition and personality that creates personal relationships and ongoing advice and service. AI can, however, play an integral role in supporting advisers and compliment the advice given to clients.
For a personal touch to your financial needs contact an Edge adviser today on 041 581 2509 or [email protected]
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