Many industry leaders are captivated by the prospect of Artificial Intelligence (AI), due to the potential it has to be applied in ground-breaking ways. However, some finance leaders remain cautious, perhaps because of the perceived threat of automation to finance sector jobs.
The more likely outcome is a positive one though. Going forward, AI will allow finance employees to achieve more on any given day. It will also lead to the creation of new (and more rewarding) roles as the job market continues to evolve. Finance leaders must prioritise investment in their team’s training, equipping them to deliver unique value that a machine can’t replicate.
The key to leveraging AI's potential lies in using it in the right ways and acting at pace. Chat GPT is an example of a cutting-edge innovation that has taken the world by storm. In this article, we’ll explore what it is, how it can be used in finance/accounting, and what business benefits it can bring about.
What is Chat GPT?
Rising to prominence in the last year, OpenAI are a technology company/research lab based in the US. They are responsible for developing Chat GPT, an AI chatbot they released back in November 2022. It is based on their GPT-3 family of big language models and has been fine-tuned (a transfer learning method) using both supervised and reinforcement learning approaches.
At its core is transformer architecture, a revolutionary development introduced in 2017 that has since become the foundation for many of the most advanced language models available today. While chatbots have been around for some time, Chat GPT represents the next level of innovation in this rapidly evolving field.
It sets itself apart from other chatbot solutions by utilising cutting-edge artificial intelligence and natural language processing (NLP) technologies. Unlike traditional chatbots (which were rule-based and limited in their ability to provide nuanced responses), it uses the power of deep learning to generate real time responses that truly understand user queries.
Recent advances in ML (machine learning) have opened up promising new avenues for enhancing people's lives and expanding their capacities. This can also be said with regards to AI in finance and accounting.
Artificial intelligence shows the greatest promise for automating mundane jobs, freeing time up for employees so they can tackle more meaningful endeavours. For example, in customer service, Chat GPT can answer FAQs, while human employees focus on the more subtle and sophisticated conversations.
How can finance teams use Chat GPT?
There are several examples that immediately spring to mind when thinking about the ways Chat GPT can be utilised in finance and accounting, such as the following:
Investment analysis & prediction
Its capacity to evaluate massive datasets in much less time than a human is one of its most important functions. This is especially helpful for analysing financial markets and forecasting outcomes.
Chat GPT is useful for analysts who are looking at market data, financial accounts, and other information that is used to inform important investment choices. They may make accurate financial projections by first training the AI on previous data, and then harnessing it to recognise patterns and make sound predictions.
Risk management & compliance
Chat GPT can potentially help finance departments to meet compliance and regulatory requirements by automating compliance checks and monitoring activities for potential violations. It might, for example, examine legal papers to ensure businesses are following the rules.
It can also detect and evaluate emerging risks, which allows companies to take the relevant preventative measures. This technology can accomplish this much quicker than a person, and access much more data while doing so.
Identifying financial variables
Training on data and conversational analysis of findings may aid in pinpointing which model parameters have the greatest weight on the outcome. Chat GPT can be trained on various financial data, including historical financial statements, market data, and economic indicators.
This allows it to identify correlations in the data that might be difficult for a human analyst to identify. As soon as it identifies the key variables, it can provide suggestions for adjusting the model to account for them.
Chat GPT may be instructed to generate summaries of financial data, making it useful for report preparation. This may be especially helpful when a large amount of information must be presented in an organised and digestible manner. In this instance, it just needs a blank template to start generating professional-looking reports in minutes.
Chat GPT's use of chatbots allows for 24/7 service, ultimately resulting in a better customer experience. In addition, chatbots can provide reliable answers to customer questions. Chatbots, unlike humans, don't experience fatigue, boredom, or distraction. Therefore, they can maintain a high quality of service for more extended periods of time.
This is especially helpful for responding to common or repetitive queries, since chatbots can do it quickly and accurately without the need for human resource in this area.
Successful investors will recognise the importance of excellent portfolio management in maximising returns while limiting risk. Portfolio managers may benefit from Chat GPT's real time information and analysis of market movements/financial data throughout this process.
Macroeconomic statistics, firm profits reports, news headlines, and the mood of social media users are all examples. With this information at their disposal, portfolio managers may make calculated investments, fine-tune their portfolio allocations, and capitalise on developing market trends.
What are the benefits of Chat GPT in finance?
Chat GPT provides finance teams with many advantages, including increased productivity, better customer support, and lower expenses. The variety of ways in which it can be utilised make it a valuable resource for businesses looking to maintain their edge in the market and provide clients with the best possible service. Here are a few more of the benefits it creates:
Improved data-driven decision-making
Its speed and accuracy in processing massive volumes of data will enhance the quality and precision of jobs like risk assessment. By analysing large datasets, the AI can identify trends that might otherwise have been missed, enabling finance professionals to make more informed and accurate decisions. By detecting anomalies in data, Chat GPT also aids finance leaders in spotting and dealing with fraudulent activities.
By allowing existing employees to achieve more, Chat GPT can help to diminish the costs associated with manual work and recruiting new personnel, thus saving the business money. It also provides customised services via data analysis and individualised suggestions, which may increase client happiness and loyalty.
The AI chatbot can facilitate the automation of routine finance tasks that are otherwise time-consuming for employees in that sector. Its speed in processing makes it ideal for the finance industry given the importance of the work they do.
Data input is just one example of a manual process that can be automated, using Chat GPT to improve efficiency and reduce wasteful errors that would significantly impact productivity and profitability.
Getting the most out of Chat GPT with finance software
The modern finance team must embrace the latest innovations if they want to work smarter. Conversational AI can look at market information in real time and make sense of complex financial data. However, when dealing with their own performance, finance teams must still feed this technology with high-quality data that has been sourced and stored efficiently (if they are to derive accurate conclusions from it).
For this purpose, there are innovative Cloud accounting solutions like Advanced Financials, which should be integrated within the business operations of any forward-thinking finance function. With this digital financial management method, businesses can more easily monitor key KPIs related to revenue, cost, and profitability. With this information, finance teams can plan, predict, and budget more effectively.
Cloud-based accounting software, unlike on-premise solutions, is accessed remotely via the internet. This ensures your sensitive data is more secure, as it is stored on an offsite server and backed up regularly. It also means employees can get their hands on important information, whenever and wherever they need it. With these capabilities, organisations can hire talent from further afield, and offer staff a more modern hybrid working model.