10 Ways to Use ChatGPT for Finance
The advent of AI has sparked a transformative revolution across industries, from crafting visuals to shaping presentations. You might be living under a rock if you haven’t heard about ChatGPT, the leading AI chatbot transforming the world. As ChatGPT continues to redefine conventional practices, its integration into the finance sector underscores its invaluable role in enhancing productivity. Let’s look at 10 ways to use ChatGPT for finance.
Table of contents
- Why Use ChatGPT for Finance?
- 10 Ways to Use ChatGPT for Finance
- Benefits of Using ChatGPT for Finance
- Challenges of Using ChatGPT for Finance
- Frequently Asked Questions
Why Use ChatGPT for Finance?
By leveraging ChatGPT’s capabilities in finance, businesses can enhance operational efficiency, customer engagement, and decision-making processes, ultimately driving growth and success.
- Efficiency: ChatGPT automates tasks, expediting customer support, data analysis, and reporting, allowing financial professionals to focus on strategic endeavors.
- 24/7 Availability: ChatGPT operates round-the-clock, providing instant responses to customer queries and facilitating real-time decision-making.
- Data-Driven Insights: It analyzes vast amounts of financial data, generating actionable insights for market trends, risk assessment, and investment strategies.
- Personalization: ChatGPT tailors recommendations based on individual financial goals, risk appetite, and preferences, enhancing the customer experience.
- Cost Savings: Automation reduces the need for additional human resources, resulting in cost savings while maintaining high-quality service.
- Risk Mitigation: ChatGPT assists in identifying potential risks and fraud, enhancing security and safeguarding financial operations.
- Compliance Support: It helps navigate intricate regulatory frameworks, ensuring adherence to financial regulations and minimizing compliance risks.
- Accessible Education: ChatGPT educates clients and employees about financial concepts, fostering better financial literacy and decision-making.
- Quick Reporting: It streamlines report generation, creating accurate and comprehensive financial reports in a fraction of the time.
- Innovation: Utilizing cutting-edge AI technology like ChatGPT showcases the organization’s commitment to innovation and staying ahead in the digital age.
10 Ways to Use ChatGPT for Finance
These applications showcase the versatility of ChatGPT in transforming finance-related operations and enhancing decision-making processes:
- Generating Reports
- Analyzing Text Data
- Question Answering
- Interactive Data Analysis
- Creating Investment Summaries
- Generating Financial News Briefs
- Automated Customer Interactions
- Forecasting Narratives
- Translating Financial Jargon
- Training and Simulation
Formulating the reports is a dedicated and serious task that determines numerous decisions and actions of the company. You can use ChatGPT to aid you in the process by providing concise and descriptive reports. Here are two prompts to help you:
Prompt 1: “Please generate a comprehensive monthly financial report for [your company/organization name], including revenue, expenses, profitability, and cash flow for the last quarter.”
Prompt 2: “Generate a comparative analysis report for [your company/organization name] and its top three competitors, focusing on key financial metrics like revenue growth, profit margins, and return on investment.”
Putting in the second response, we found the report comprising: Introduction, Methodology stating formulas of Revenue growth, profit margin and Return on Investment (ROI), financial metrics analysis including the stated three for each competitor, which was followed by the analysis of the findings and conclusion.
Must Read: How to Use ChatGPT? Here are Top 10 Tips!
Analyzing Text Data
Text data analysis refers to the interpretation of numbers from various theoretical sources such as news, social media posts and analysis reports. ChatGPT can help to analyze financial reports, news and market sentiments, assess the risk, plan and forecast financial data and process it according to compliance and regulations.
We provided 150-word text data for analysis. Here is the prompt, followed by key pointers of analysis.
The analysis was seen to comprise the following details:
Revenue, gross and net profit margin, investment in R&D, balance sheet, competition, market positioning, overall performance, concerns and recommendation.
There are two methods to use ChatGPT for question answering; one is with data, while another is without specific data. You can opt to give the data and ask specific questions, such as to
- Analyze the data
- State patterns
- Indicate patterns
- Suggest best practices and measures
- State profitability, financial ratios, liquidity
- Provide investment opportunities
Prompt: What are the best investment opportunities for your parent company, “OpenAI”, based on your information on available financial data?
Besides, one can also use it to generate hypothetical scenarios and ask questions about financial concepts and planning, risk management, market trends and other relevant topics.
Prompt: “State finance market trends for an ed-tech company based on your outdated information”.
Interactive Data Analysis
ChatGPT aids in interactive data analysis by providing you cues to develop visual representations and providing room for real-time updates in your data. It can guide or recommend you in handling interactive data analysis through drill down analysis, parameter adjustments, what-if and comparative analysis.
For instance, we tested it by giving a prompt to develop a line bar while knowing its incapability to do so. The results were descriptive methodology based.
Prompt: “Create a line bar for financial data indicating zig zag development”.
Creating Investment Summaries
ChatGPT is capable of handling voluminous queries to provide responses in seconds. Based on this, a knowledgeable person or experts can use it to create quick summaries out of multiple options. You can provide different parameters of your interest or ask it to generate some for you. For instance, we asked it to generate the parameters.
Prompt: “Summarize the important aspects of the R&D sector of disease-based companies crucial for judgment about investment.”
Generating Financial News Briefs
ChatGPT is capable of generating financial news briefs based on its own data or given information. While generating the briefs, it provides data comprising a source, summary, and key metrics, including stock performance and revenue figures and disclaimers about its limitation. It would require you to choose a relevant topic before going on to generate the stated summary.
Prompt: “Generate financial news brief on Nestle based on your information”.
Automated Customer Interactions
One of the finest methods to increase customer satisfaction is by providing rapid and precise responses to your consumers. However, this usually involves quite a bit of staffing capacity to be done properly. Whenever it comes to communication, integrating ChatGPT capabilities can help optimize this and enhance reaction time.
Even though ChatGPT has its flaws, it improves the chatbot’s ability to respond and gives a human agent additional time to handle other issues. Email management solutions are a critical component of any organization. These can be combined with ChatGPT to enhance email responses and send out automated responses much faster than a customer service representative. In a banking setting, consumers might inquire regarding their account balance, latest transactions, or credit card benefits and get instantaneous, precise responses.
Example prompt for a bank chatbot: “What is my last transaction?” “What is the balance amount in my account?”
With the use of ChatGPT’s features, businesses may create sophisticated predictive models that can identify patterns, predict future market conditions, and provide projections. ChatGPT can identify patterns, such as demand and supply, market fluctuations, and others, with greater precision and share fundamental variables faster than competitors while considering a wide range of inputs. ChatGPT for finance might produce a narrative that describes the projected outcome in simple terms, making it easier for non-experts to comprehend its implications.
Prompt: We have forecasted from a predictive model that has shown that the sales for our pharmaceutical company will increase by 20% in the next quarter. Can you generate a narrative that describes the forecast in easy-to-understand terms?
Translating Financial Jargon
The financial field is filled with various terminologies which might not be easy to understand for every individual. Every business has professionals who are well-versed in financial concepts and professionals who might not be familiar with those concepts. ChatGPT could convert professional financial terms into simple terms, making financial data easier to understand for non-expert users or consumers and bridging the knowledge gap.
Prompt: Could you explain the following terms in simple language: “liquidity”, “capital pricing”, and “security in market analysis”?
Training and Simulation
The ChatGPT tool by OpenAI can be utilized to look into the most prevalent issues and prepare preliminary responses, allowing team members to focus on the most pressing challenges. It can provide solutions or construct scenarios based on financial data when educating new analysts or modeling various financial conditions for strategy creation. It can review and analyze current policies and feedback to determine and bring about areas for change.
Prompt: Can you generate a hypothetical situation for a downfall in the market and then provide suggestions for a financial analyst to work through this situation?
Benefits of Using ChatGPT for Finance
There are several benefits of using ChatGPT for finance, such as the following:
- ChatGPT has the potential to deliver current insights into market patterns because it acts as an analytics dynamo with the capacity to analyze a huge amount of financial data. This information can help develop future projections and moves for your business.
- Many jobs that were carried out manually by skilled analysts can be automated using generative AI models. AI models can perform the majority of the job instead of searching over spreadsheets and reports. Businesses can do this to save time and money and limit the possibility of errors.
- A generative AI model is able to evaluate a lot of financial data and provide reports that are easy to read and understand. Business executives can utilize them to better understand potential dangers and opportunities in the financial markets and make better investment decisions.
- Finance experts can more precisely evaluate potential risks with ChatGPT. ChatGPT’s capacity to quickly evaluate large amounts of data aids in the ability to spot suspected fraud or additional anomalies in real time.
- A significant challenge for the finance sector is regulatory compliance. However, compliance can be addressed more effectively with the help of ChatGPT. Financial data analysis, particularly transaction data analysis, can find any deviations from accepted regulatory practices and notify the appropriate departments. Financial organizations can avoid costly fines and negative publicity by taking a proactive approach.
Challenges of Using ChatGPT for Finance
ChatGPT might be a great assistance to the financial sector, but it also poses certain challenges too. Some of the challenges are as follows:
- ChatGPT is dependent on the volume and quality of data it gets. However, its resources and old data are centered around 2021 and earlier.
- Another effect of outdated and incomplete data is that ChatGPT finds it challenging to comprehend and offer in-depth analysis of financial reports or legal provisions.
- The use of AI in financial services may potentially lead to ethical concerns with regard to decision-making and the analysis of consumer data.
- The present breed of LLMs lacks a deep comprehension of the circumstances of a consumer. Models will need additional training in order to comprehend the language and vocabulary specific to the banking business and the massive volumes of financial data and documents.
- Popular LLMs like ChatGPT presently have a limited capacity to provide justification for their statements or mention sources.
ChatGPT is an investment in lifelong learning as well as a tool for today. It can help you stay informed on the most recent financial developments, trends, and research. Financial professionals can optimize their workflow and stay on the leading edge of their industry by utilizing ChatGPT’s powerful features. You can make sure that the introduction of AI solutions like ChatGPT for finance in the organization is beneficial and effective by promoting a culture that encourages continual learning and keeping up with the most recent developments.
Frequently Asked Questions
A. Yes, ChatGPT can be used in finance for various purposes such as customer service, stock market details, financial reports, etc.
A. There are various ways in which ChatGPT can be used for financial planning, such as setting up financial goals, budgeting strategies, investment strategies, tax planning, debt management and more.
A. Some of the benefits of ChatGPT in finance are as follows: summarizing complex financial insights, improving customer satisfaction and experience, risk assessment and investment planning.
A. By introducing ChatGPT in their organization, the CFO can streamline the processes, enhance efficiency and improve the customer experience.