MC Explainer: How can banks use ChatGPT?

Over at the World Economic Forum at Davos, where some of the world’s rich and powerful have congregated, ChatGPT is a hot topic of discussion ((Image Courtesy: NURPHOTO VIA GETTY IMAGES)

Banks in India are increasingly incorporating technology such as artificial intelligence (AI)-backed services in their operations. From using chatbots to partnering with fintech firms, banks are exploring how to include new-age technology.

The latest in the world of AI is ChatGPT, an advanced chatbot developed by OpenAI, an AI research laboratory backed by investors including Microsoft and Khosla Ventures.

While it is likely more useful than other chatbots or dialogue systems, it’s still too early for Indian banks to start using ChatGPTs.

What is ChatGPT?

According to OpenAI, ChatGPT is a model that interacts in a conversational way.

Termed one of the most advanced chatbots with over 175 billion communication parameters, it can be used across industries to create conversations, help solve queries, and engage with customers, among other things.

What is the technology used in ChatGPT?

ChatGPT is based on a large language model (LLM), a tool that is trained with massive amounts of data and information to accurately predict conversational behaviour.

The ChatGPT technology has been constructed using GPT 3, an autoregressive LLM that uses deep learning to produce human-like text. GPT 3 technology is very strong compared to its predecessor.

Stanford University said: “GPT 3 has 175 billion parameters whereas its predecessor, GPT 2, had 1.5 billion parameters. This increase in scale drastically changes the behaviour of the GPT 3 model and enables it to perform tasks it was not explicitly trained on, like translating sentences from English to French, with few to no training examples.”

How are global companies using ChatGPT?

ChatGPT is widely used for marketing and content generation. It has been extensively used to create blogs, content pieces, and short communication texts.

It has more powerful hardware and optimised algorithms, which can be used to generate conversations quickly. ChatGPT is likely more useful than other chatbots or dialogue systems.

“The dialogue format makes it possible for ChatGPT to answer follow-up questions, admit its mistakes, challenge incorrect premises, and reject inappropriate requests,” the company said.

Global technology giant Microsoft plans to incorporate the AI software behind ChatGPT in its search engine, Bing, to compete with rival Google. It plans to use the tools built by OpenAI to offer human-like answers to queries typed into its search engines rather than provide a list of websites, as it does currently.

Do banks in India use chatbots?

Many private and public sector banks have chatbots on their websites or apps. These chatbots are used mainly for basic communication and customer queries.

ICICI Bank has a chatbot called iPal, which guides visitors on the website to service options. HDFC Bank’s Eva chatbot on its website assists visitors with complaints and other services.

State Bank of India, the country’s largest lender, has set up institutional centres to develop AI-motivated products. Bank of Baroda has introduced advanced gadgets and machines at its branches to provide account details and other services.

Chatbot Magazine, which tracks developments in the global AI and chatbot industry, said: “These chatbots can be used to capture customer leads which can be sent to the bank’s team for additional follow up until the sale is completed. Other than this, chatbots are used to collect feedback in a more conversational and interesting manner.”

How can banks in India use ChatGPT?

ChatGPT's automated response system can be trained by banks and has the potential to be introduced in their systems. The use of ChatGPT can reduce the number of representatives that banks need for customer service. This can help them to reduce costs.

Experts said ChatGPT is currently not of much use for banks on the processing side but they can use it for marketing purposes.

Gaurav Samdaria, chief business officer of Perfios, a financial data analysis company, said: “With time, banks will look forward to using ChatGPT in specific and core sections of their operations. Once the wider tech community starts incorporating ChatGPT in their products, banks will start using the chatbot.

For now, it is too early for banks to mould their operations around ChatGPT.”

What are the risks involved with ChatGPT?

While the advanced technology used in ChatGPT has turned out to be beneficial for many reasons, there is also some potential risk.

Misinformation has been a growing issue because ChatGPT accesses information from the internet, which itself has a lot of wrong information.

Given the potential risks involved for banking and the financial sector, experts said there is a serious need to look at ChatGPT from all angles before using it.

“When it comes to using ChatGPT, banks are bound by privacy and regulatory issues. They cannot share or store customer data on a private and unregulated platform like ChatGPT,” Samdaria explained.