An opportunity for banks
76% of respondents see tools such as ChatGPT as an opportunity for their organisation. Even more so: the majority of respondents have plans to implement ChatGPT or other AI-powered chatbots for specific use cases (57%). This figure is even more striking for credit institutions (88%). This indicates that banks have high confidence in generative AI technology, a sign that the adoption process is likely to accelerate in the coming years.
Survey respondents point to opportunities to improve customer services. Examples could include:
- More personalised banking experiences thanks to enhanced customer analytics
- Investment advice based on larger and new sources of data
- Customer service chatbots available 24/7
ChatGPT can also support financial institutions in detecting fraud by analysing transactional data in real-time, and provide support to the Tech team. In a context of scarce Compliance and IT resources, ChatGPT could be part of the solution.
However, this optimism cannot overshadow the current limitations of ChatGPT:
- Inaccuracies, sometimes going as far as the complete invention of an answer
- Distance from the core business, which raises the question of training tomorrow’s experts
- Confidentiality: each input sent to a language model passes through the servers of its creator, Open AI in the case of ChatGPT. The model cannot therefore be used to process confidential data, particularly those protected by the GDPR
“The release of ChatGPT marked the beginning of a new era for business. The first movers will be rewarded with lower costs, increased speed, and greater accuracy.”
declares Laurent Marochini, Chair of ABBL’s FinTech and Innovation Forum Head of Innovation at Societe General Securities Services Luxembourg.
“Chat GPT and the like will have a positive impact on efficiency and could be part of the answer to growing pressure on banks’ profitability.”
adds Ananda Kautz, Head of Innovation, Digital Banking & Payments at the ABBL.
Do banks allow their staff to use ChatGPT?
Limitations in use may reduce the pace and scope of adoption.
For all respondents, here is the level of limitation:
- 51%: the tool can be used freely by all staff members
- 24%: partially by certain categories of staff
- 25%: blocked for all staff members.
For banks, the situation is characterised by a higher level of restrictions :
- 41% free use
- 19% partial use
- 38% blocked.
In this regard, more clarity from data protection and financial services authorities would be useful on the usage of generative AI in the banking sector. This will be an important signal to credit institutions to proceed with more enhanced experimentation with the technology.
Familiarity of senior management with ChatGPT is another important factor in the technology adoption:
- 7% of senior managers of financial institutions are very familiar with ChatGPT
- 53% – somewhat familiar
- 40% not at all
This entails that more education and dedicated training should be conducted internally. It is key to educate both employees and executives on opportunities and risks related to ChatGPT. For a large part of banks it is yet to complete the learning journey for the technology and translate this into internal assessment and a specific framework afterwards.
What are the obstacles?
From the obstacle point of view, the study reveals that a significant part of banks (44%) are not equipped with necessary data and infrastructure in place to effectively implement ChatGPT or other AI-powered chatbots. Only 6% of surveyed credit institutions have all needed resources in place.
“This rate is rather low, however the situation creates good groundings for justifications for accelerating in-house innovation and development by banks and also for embarking on cooperation projects with AI-driven FinTech firms. The latter approach could be even more suitable to speed-up innovation initiates and shorten time-to-market for generative AI use-cases in banking”,
outlines Andrey Martovoy – Adviser, Innovation & Digital
A regulatory perspective
“In the European Union, AI has been attracting attention of policy makers from a regulatory point of view”,
points out Andrey Martovoy.
In 2021, the European Commission presented a reviewed Coordinated Plan on AI and a Proposal for a Regulation laying down harmonised rules on artificial intelligence (AI Act).
The AI Act sets a framework for the trustworthy usage of specific AI use-cases in many sectors including financial services. In parallel with the uptake of generative AI, EU policy makers are currently discussing updates into the AI Act proposal to regulate the usage of generative AI tools such as ChatGPT.
In Luxembourg, CSSF published a White Paper “Artificial Intelligence: Opportunities, risks and recommendations for the financial sector” and more recently released a joint thematic review with the Central Bank of Luxembourg on the use of Artificial Intelligence in the Luxembourg Financial sector. All these regulatory and policy measured are called to enable lawful, ethical, and robust usage of AI, and the ABBL is very supportive in this regard.