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Should Financial Services Companies Consider Open AI?


John Wilson, FLMI, AIRC, ACS
Data Scientist and Project Portfolio Coordinator

March 2023

This past November, Open AI ushered in a new age of Internet search with the release of Chat Generative Pre-trained Transformer (ChatGPT). The technology allows a user to ask questions and do searches using traditional dialogue as opposed to entering a bunch of search terms. The response from ChatGPT is also in dialogue form and excludes paid ads, dubious results and excessive information, which eliminates the frustration of having to cull through multiple possibilities to find the right information.

Once ChatGPT posts a result, the user can further engage in a ‘conversation’ with follow up inquiries. ChatGPT is also able to write code, essays and do an assortment of other functions. This capability has caused alarm in both academia and in the corporate world. Many academic institutions are blocking access to ChatGPT within their systems and some corporations are as well. However, many are questioning if negative reactions such as blocking, banning, and disregarding ChatGPT are the right way to handle this emerging technology.

It is likely that many financial services companies are considering how to handle the impact of ChatGPT and competitive platforms that are sure to emerge. This, however, is a moot point. That is because customers will choose to engage with the platform to seek information. In fact, having interacted with ChatGPT, the AI driven responses may be able to better help consumers understand the complexities and nuances of financial services products.

To test that potential, I entered a series of questions that a consumer might ask. These questions included:

  • Why should I buy life insurance?
  • Are annuities a good investment?
  • Some say I should never buy an annuity. Is that true?
  • Is term life better than whole life?
  • Who is the best life insurance company?
  • Do I have to work with an agent when buying life insurance?

The answers provided were reasonable and plausible. What was interesting is that almost all answers suggested it would be prudent to speak to a financial advisor. Instead of supplanting the human, the technology seems to encourage one considering these products to seek guidance.

Rather than denying the technology, embracing the tech would allow advisors to use the platform in a sales setting. As ChatGPT would likely be considered a neutral party, advisors could use the responses to strengthen their rationale of why a potential client should consider a specific product

Another aspect of ChatGPT and similar products is the impact on marketing and advertising. Most companies have spent the past 15-20 years developing and implementing a search engine optimization (SEO) strategy. SEO offered companies the ability to bid up to the top of search results. With the emergence of new technologies such as ChatGPT, will traditional search engines like Google still be able to facilitate these types of strategies? More importantly, what will replace them, if anything, and how can companies be in a position to react quickly?

Finally, OpenAI offers a series of application programmer interfaces (APIs). For a modest fee, companies could integrate APIs into their online presence that would allow a potential client to ask questions directly from a company’s website. This layer of adoption and transparency can help build trust with the client.

This day of reckoning with visible AI was just a matter of time. For companies considering their policies, I would recommend a series of steps. First, engage with the platform. Ask questions that might be asked in either an internal or sales setting. Consider the responses and how they might be integrated to enhance a process rather than supplant it.

Second, maintain a working knowledge of emerging platforms similar to ChatGPT. Google is close to releasing their own version and Microsoft, having taken a $10 billion stake in Open AI, is likely to integrate ChatGPT or a spinoff as part of their Office suite of products.

Third, rethinking marketing strategies will likely be necessary. While it is reasonable to assume that monetization strategies will emerge concurrently with these AI platforms, there will likely be a need to consider new ways of optimizing search results and ad placement in virtual environments.

Finally, utilize the developed and soon to be developed APIs to integrate ChatGPT type technology into your existing customer-facing presence. This layer of integration may encourage customers to work with an advisor and will add transparency to an otherwise complex process.

There will come a day when everyone recalls when ChatGPT emerged and how it was simultaneously exciting and frightening. These types of platforms are destined to become ubiquitous. The sooner you embrace that capability, the better you will be able to integrate AI into your day-to-day operations.