How Banks Are Tapping into Artificial Intelligence

You may be experimenting with ChatGPT and other AI, and so is your bank. Financial institutions are incorporating AI into their services, but the road to innovation is fraught with risks.

“AI systems have been widely used for years, with banks spending billions to automate functions like trading, risk management, fraud detection and investment research. But the rise of generative AI tools has pushed banks to develop new offerings,” says Bloomberg ThinkAdvisor’s Saritha Rai.

Rai says JP Morgan is working with U.S. regulators and walking them through its first set of generative AI pilot projects to ensure all controls are in place. The projects include using AI to generate earnings summaries, a helpdesk service that provides precise problem-solving steps instead of merely sending customers links to related articles to address an issue, and a tool that scans speeches by Federal Reserve officials to detect policy shifts and glean signals for trading.

Take a look at these other examples of AI in finance, including:

  • Helping financial institutions make credit and underwriting decisions.
  • Managing financial risk by pinpointing trends, conserving manpower, and ensuring better forecasting.
  • Providing information to help customers make better trades.
  • Personalizing banking.
  • Preventing and detecting cybersecurity and fraud.

If you’ve experimented with AI yourself, you may be familiar with how generative AI tools like ChatGPT do a poor job distinguishing between fact and fiction with what it accesses online and can even “hallucinate” facts as much as 27% of the time. “Because chatbots learn from patterns in data and operate according to probabilities, they behave in unwanted ways at least some of the time,” explains The New York Times’ Cade Metz. In short, there’s a measurable chance that results with AI are, quite simply, wrong. That may not be a big deal when asking Alexa for movie recommendations, but the risks can be dire for financial institutions.

Then there’s the gamble with data privacy. Generally speaking, what you “feed into” these databases can be stored, used for machine learning, and, ultimately, shared. Rai says that JPMorgan was one of the first companies to restrict employee access to ChatGPT for that reason and is now working to ensure that its pilot projects have tight protections for the confidential data it deals with.

It’s vital to be aware of these issues and more when dealing with the organizations that hold your money. Be skeptical when asked for personal information and talk to an actual human if you receive information or news from your financial institution that surprises you. While financial institutions are taking a careful approach, it’s still possible that the AI they begin to incorporate is making the wrong assumptions or the security measures they have in place aren’t up to par with the latest threats. Skepticism will also reduce your chances of becoming a victim of AI fraud. What you might think is your bank contacting you could be sophisticated AI, like an AI voice attack or convincing AI-generated emails.

The same is true for the IRS. It uses AI to help automate tasks and better flag fraudulent activity and tax evasion. It’s equally vulnerable to AI attacks, like scammers using it to generate compelling tax bills or requests for personal data. Feel free to contact us with questions.

Image Copyright: peshkova

Client Spotlights

A terrifying home invasion involving men with masks and guns set Pam Wood on an unexpected path to business ownership in 1981….
What happens when you combine a passion for creating, a knack for business, and deep family values? For Scott Klingler, owner of MergeWorks, it resulted…
Bessie M. Irizarry loves embracing a good challenge. It’s one of the many reasons she’s earned respect as a female engineer and business owner in…
San Antonio native Mark Lopez can’t recall a time he didn’t envision himself following the footsteps of his father, a project manager, into the construction…
Siew Pang knows that the key to unlocking the American dream can be discovered by embracing unexpected opportunities….
If you’re a San Antonian, you may not want to imagine your weekend without brunch at the city’s beloved Magnolia Pancake Haus….
Greg Thompson has long respected money and how it can catalyze greater things….
You may not be aware of it, but Don Lasseter has helped you throw a party. How do we know that? He’s the franchise owner…
Land surveyors aren’t known for exceptional customer service. But why shouldn’t they be? David Breaux set out in 1998 to prove that treating customers right…
When Lance Rose sees a business need, he fills it. That’s how he and Terri, his wife of 30 years, have evolved into the proud…
Matt and Lara Bruhn met while in graduate school at Harvard. He served as an officer and F-15C pilot with the U.S. Air Force….
Growing up in Piedras Negras, Coahuila, Mexico—just south of Texas along the Rio Grande—Oscar E. Flores dreamed of becoming a designer….

Blogs and Articles

Digital Assets and Your Taxes

The Goldilocks Rule for Tax Withholding

How Inherited Assets Affect Your Taxes

Getting Hit by Someone Else’s Bankruptcy

Welcome to Texas: Cutting Tax Ties with Your Previous State

Reaching the Unreachable IRS

How Is Costco Gold Taxed?

Yes, You Do Still Have to File Taxes

Retirement Plan Perks for Texas Small Businesses

Top 6 Worst Social Media Tax Tips

What’s Happening with the Corporate Transparency Act?

Love & Marriage & Your Business Assets

How Small Business Owners Reduce Taxable Income