Despite the war in Ukraine, high inflation and changing interest rates, the business world has been focused from the start of 2023 on something else… ChatGPT. A chatbot using artificial intelligence(AI) concepts. Since every branch of business is using either ChatGPT or other AI-based tools, Finance Magnates decided to take a look at this phenomenon to see if and how it can impact the retail FX/CFD trading industry.
OpenAI, founded in 2015 by influential figures including Elon Musk, aims to create AI that benefits humanity. Despite Musk's resignation from the Board of Directors in 2018 due to disagreements, OpenAI continues its mission with support from Microsoft, which provides the necessary supercomputing infrastructure. ChatGPT, initially based on GPT-3.5, saw a version utilizing the latest model, GPT-4, made available to limited paid subscribers in March 2023.
With a staggering 100 million monthly active users within just two months of its launch, ChatGPT set a record for the fastest-growing user base in the history of consumer applications. Financial institutions have also embraced AI solutions, such as JP Morgan's AI-powered platform JPM Coin for instant cross-border payments and Klarna's integration of ChatGPT for personalized shopping recommendations. Other notable AI tools include Tableau for data analysis and visualization, Murf for text-to-speech conversion, Jasper for efficient content generation, Fireflies for real-time transcription, and Pictory for transforming long-form content into engaging videos.
How AI Could Serve the FX/CFD Industry?
First of all, we should diagnose what are the biggest problems and risks related to conducting business in the FX/CFD Industry. And, from a broad perspective, artificial intelligence (AI) has numerous applications in the financial industry, ranging from fraud detection to customer service.
Artificial Intelligence can help financial institutions detect and prevent fraud by analyzing large amounts of data and identifying patterns and anomalies. This can include analyzing transactions for suspicious activity or detecting fraudulent account openings. At the same time, AI can help financial institutions assess and manage risk by analyzing data and predicting market trends. This can include predicting credit risk for loan applications or assessing the risk of investment portfolios.
Artificial Intelligence can help financial institutions ensure compliance with regulations by analyzing large amounts of data and identifying potential violations. Sophie Gerber, the Co-CEO at TRAction Fintech shared her opinion with us on AI usage: “Artificial intelligence can be great at accepting input in natural human language and converting it to a specific formatted code or database. For instance reading a broker trading statement in PDF and outputting an XML trade report.”
AI can be and is used in customer service departments. AI-powered chatbots can provide 24/7 customer service, answering questions and providing support to customers. It can also help prepare content either for the education of retail traders or for marketing purposes. Overall, AI can help financial institutions streamline their operations, reduce costs, and provide better services for their customers.
AI Brings Its Own Risks
But, AI means not only benefits but also risks. Elon Musk voiced his concerns just recently in March 2023. The Chief Executive of Twitter and Tesla is among the tech leaders who have urged a pause on the development of the most advanced artificial intelligence systems. In an open letter released by the Future of Life Institute, Musk and more than 1,000 other signatories warned that AI systems present profound risks to society and humanity. They called for a six-month halt in creating and deploying AI systems that are more powerful than GPT-4, the latest chatbot from OpenAI, a research lab that Musk co-founded.
According to the letter, AI developers are engaged in an out-of-control race to build and use ever more powerful digital minds that no one can understand, predict, or reliably control. These AI systems could pose various dangers, such as spreading misinformation, invading privacy, discriminating against people, influencing voters, and threatening human existence. Musk has repeatedly expressed his concerns about the potential harm of AI, comparing it to nuclear physics that led to both nuclear power and nuclear bombs.
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