Artificial Intelligence (AI) is big news at the moment, with tech firms saying it promises the best of all future worlds, while others – including several high-profile pioneers – warn that the implications for jobs are complicated and uncertain. Even as far back as 2017, physicist Stephen Hawking said the emergence of artificial intelligence could be the, “Worst event in the history of our civilisation”. Whichever side of the digital divide you sit on, AI is undoubtedly here to stay and changing many aspects of our lives, including the way we access finance.
WHAT IS AI IN FINANCE?
Most of us have heard of Chat GPT, which stands for Chat Generative Pre-trained Transformer, which was developed by an AI research company, OpenAI. Launched last year, in the first five days after it was released it attracted more than 100m users. Chat GPT allows users to have human-like conversations with a chatbot, along with helping them to create content and web code.
Already used by many businesses to direct customers’ enquiries quickly and efficiently, in finance AI is increasingly using machine learning (ML) to mimic human intelligence and decision-making about managing, investing and protecting money.
From chatbot assistants to automated tasks and fraud detection, over the past few years we have become familiar with the way that tech is changing the way we manage our personal finances. In commercial finance too, AI is increasingly used to predict and assess loan risks, manage underwriting and spot fraud.
Speak to Complete Commercial Finance’s expert team on 01553 611619 to organise a business loan today. IS AI IN FINANCE A GOOD THING?
Some have argued that the use of AI for large data analysis could help to avert future financial crises and bridge the gap between financial institutions and regulatory bodies to ensure compliance and reduce corruption.
However, others warn that the abilities of machine learning models are limited by the data on which they are trained, and also that AI chatbots can, on occasion, generate false information – known as ‘hallucination’ – which can incorrectly disrupt transactions and frustrate customers.
While we are on the cusp of change in the way that AI affects our financial lives, the future governance of these types of applications is important to prevent bias or manipulation for commercial gain. The proposed EU AI Act, the world’s first comprehensive AI law, is a step towards creating an ethical financial ecosystem for the future, and this area is likely to be closely regulated as it evolves.
For personalised advice on your business’ finance application, speak to Complete Commercial Finance on 01553 611619. WILL AI REPLACE FINANCE MANAGERS?
In many sectors, AI has the potential to replace real people in the workplace – from call centres to retail, technology can eliminate the need to have a human being at the end of a phone call or to take payments in-store.
Yet, interestingly, in a study of one call centre where AI was introduced to manage calls for a luxury brand, rather than increase productivity as expected, the benefit of AI was that it transformed staff into successful sales agents, as AI enabled them to up-sell products rather than simply answer questions or log calls. Used sensitively, AI can support and enhance employees’ abilities, rather than replace them.
Some call centre companies have also spoken of their concern about adopting AI to replace staff, saying that it risks irritating customers who like to speak to a ‘real person’. The reality is that most of us prefer to be able to connect with someone who can help us with our query, and this is undoubtedly true in finance too.
It has been suggested that banks could train chatbots to provide investment information to help clients to make informed decisions or help with financial planning, yet the confidence of customers to follow AI advice may be some time off. The human touch is still very important, particularly when it comes to financial decisions, and while AI is a valuable tool it cannot replace years of expertise, experience and knowledge of the market.
Many businesses are frustrated by the increasingly centralised operations of banks, and few have a direct contact to call for help and advice in organising a bank loan or funding. Regional companies such as Complete Commercial Finance, which has consultants in Norfolk, Cambridgeshire, Suffolk and Essex can bridge the gap and provide ‘real person’ advice and guidance to maximise a company’s ability to tap into the right business finance.
Most companies want to work with someone who understands their individual needs and goals and can provide personalised advice. While AI is becoming increasingly sophisticated, it still has limitations and the value of a commercial broker’s judgement in presenting a funding application to the right lender to achieve a positive outcome for a business cannot be undervalued.
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