There seems to be no end of articles about AI and, particularly, ChatGPT. In an August 22, 2023 article in CFO, Ori Pearl writes that emerging technologies have been changing the face of business for some time now. “One of the latest iterations, 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, he says, “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.”

But, like many others before him, he warns that 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, Pearl says, “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.”

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.”

Pearl then describes four areas that hold the most potential for financial professionals.

1. Financial Analysis and Forecasting: 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. According to Pearl, “businesses can input financial reports into ChatGPT and utilize its robust capabilities for added analysis and insights.

2. Risk Management: 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.

3. Strategic Planning: 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, advises Pearl, can be used during strategic planning sessions to optimize decision making and also future-proof an organization for potential disruptions.

4. Customer Insights: Pearl points out that 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, says Pearl, “finance leaders can utilize ChatGPT to enhance decision-making processes, improve operational efficiencies, drive business growth and gain competitive advantages.”

For more, check out 4 Ways Finance Leaders Can Leverage ChatGPT | CFO.