4 Ways Finance Leaders Can Leverage ChatGPT – CFO.com
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When used responsibly, finance leaders can utilize the AI chatbot to enhance decision-making, improve operational efficiencies, and drive business growth.
Emerging technologies have been changing the face of business for some time now. Artificial intelligence, in particular, has likely made the most impact with its ability to complete some of the most complex work processes in a fraction of the time it takes human workers. One of the latest iterations, ChatGPT, is no different. The AI chatbot has created quite a stir lately for its potential to create a range of content. However, its knack for turning a phrase isn’t the only skill ChatGPT can handle. The technology can provide invaluable resources for strategic finance teams.
ChatGPT and AI’s impact on the finance industry hasn’t gone unnoticed as it has the ability to automate data entry, report generation, and financial modeling to free up time for finance teams to lean on their expertise and focus on more value-added responsibilities. There’s also something to be said about the AI tool’s capability to analyze large amounts of financial data and subsequently identify patterns or trends within that information to gain improved insights to inform critical business decisions.
In today’s rapidly evolving financial landscape, it’s imperative for finance teams to embrace generative AI tools to remain competitive. Failing to do so not only hinders their potential for growth but also places them at risk of falling behind their forward-thinking peers who have harnessed the power of this transformative technology.
While using ChatGPT in finance can help improve decision-making, increase productivity, and inform strategies, the technology does have some drawbacks. For one, the data that finance teams share with AI can be sensitive in nature, which can pose a problem when it comes to data privacy — if not confidentiality.
There is the risk that a finance team member might disclose a trade secret or proprietary information. ChatGPT has been built to learn from each interaction. There’s no telling what it will create in the future based on the information provided, and the company that owns ChatGPT, OpenAI, says it might use the data fed to the technology to improve its AI models (meaning, it holds onto data unless users opt-out).
With that in mind, it’s also important to note that someone on the team could end up generating trademarked, copyrighted, or another party’s intellectual property when leveraging ChatGPT for finance-related activities. This can pose a significant legal problem should that information be delivered and then used by a customer. Though this should go without saying, organizations will need to set certain parameters around ChatGPT’s usage and train employees on what can and cannot be divulged to the technology.
Similarly, another one of the key factors to be mindful of when using ChatGPT is its tendency to generate fictional information. As a result, it is crucial for finance professionals heavily involved in data analysis to conduct meticulous reviews of ChatGPT’s outputs to ensure their accuracy.
In light of its risks and rewards, understanding how best to leverage ChatGPT for finance can be challenging, and strategies will vary from organization to organization. For AI to add real value, it must enhance a business’s operations and decision-making. That said, there are a few areas that hold the most potential.
With its ability to provide real-time insights into market trends, competitors’ businesses, and customer behaviors, ChatGPT can be of great assistance in financial analysis and forecasting. Businesses can input financial reports into ChatGPT and utilize its robust capabilities for added analysis and insights. To enhance the functionality of ChatGPT, a practical approach is to supply it with PDFs and ask questions based on the insights derived from the financial reports.
On the surface, one wouldn’t think that ChatGPT would be of any value in identifying or managing potential financial risks. Again, this goes back to the technology’s ability to analyze financial data and detect a variety of patterns. But in this instance, it can highlight areas of concern and generate risk models that can limit the exposure to financial risk, whether operational or market-related. For example, businesses can comprehensively describe their operations and harness ChatGPT’s capabilities to build a risk management model.
When analyzing financial, market, and industry data, ChatGPT has the potential to identify not only probable challenges but also growth opportunities for an organization. These insights can be used during strategic planning sessions to optimize decision-making and also future-proof an organization for potential disruptions. For instance, it can analyze organizational data and provide or review financial models.
ChatGPT can help finance teams better understand and predict customer behaviors and preferences by examining available customer data. The technology can even generate customer profiles, predictive models, and other insights that can inform sales and marketing strategies.
AI’s impact on the finance industry is undeniable, and ChatGPT is just the most recent addition to what’s already available in the market. When used responsibly with the risks in mind finance leaders can utilize ChatGPT to enhance decision-making processes, improve operational efficiencies, drive business growth, and gain competitive advantages.
Ori Pearl is senior vice president of engineering at Tipalti.
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