[Economic Essay Contest] Role of generative AI in revolutionizing commercial banks (2024)

By Ha Ji-ung

Over the last 10 years, the global tech industry has experienced the rapid emergence of powerful artificial intelligence (AI) technologies, impacting different industries. One such AI is generative AI, composed of algorithms like ChatGPT that help create various types of digital content, including images, code, audio, text, videos, and simulations.

The wide-scale application of generative AI has led to the adoption of new approaches to content creation, resulting in many organizations embracing generative AI technologies like ChatGPT to generate content to enhance their customer experiences and service delivery.

Commercial banks are today one of the leading users of generative AI technologies, accelerating the revolutionization of the bank’s customer experiences and the provision of efficient service practices. Therefore, there is a need to discuss the role of generative AI technologies like ChatGPT in enhancing commercial banks' customer experiences and efficiency in the delivery of services.

AI is a computer science subset that focuses on developing highly advanced technologies that mimic human interactions and capabilities, enabling them to perform different tasks with higher accuracy. Moreover, generative AI technologies are created to develop audio, image, and text content through pattern recognition on the datasets provided and create unique content that would otherwise require high levels of creativity.

One example of generative AI technologies is ChatGPT, a type of language model trained using a massive dataset, making it able to understand and generate human-like texts. Many banking institutions now use different types of generative AI technologies, like ChatGPT, to enhance their clients’ satisfaction levels and efficiency in service delivery.

Commercial banks can now rely on ChatGPT and other generative AI technologies to provide their clients with personalized customer interactions tailored to assist them in meeting their specific needs. These technologies can reply to and interact with clients in real time by providing them with instant responses to the queries that they make.

Additionally, ChatGPT is programmed to respond to the client's inquiries in a structured manner that imitates human conversation, resulting in more authentic interactions. The ability of these technologies to offer quick responses to clients' prompts stands to enhance customer experiences and even the ability of commercial banks to serve their clients faster.

Many customer tasks and queries are often repetitive, so commercial banks can save time and resources by utilizing AI technologies like ChatGPT to respond to clients' needs and inquiries. Commercial banks will likely channel those saved resources and time to enhance the efficiency of their service delivery in other areas.

Different generative AI technologies' ability to function throughout the day provides commercial bank clients with improved convenience and accessibility to their customer services whenever they need them, resulting in higher customer satisfaction.

Adopting generative AI technologies allows commercial banks to offer their clients tailored financial advice amid the increased complexities of the economic landscape, resulting in increased difficulty in giving correct financial advice to clients. Embracing these technologies will likely allow commercial banks to analyze their clients' data and use the insights generated to make investment recommendations. Examples of such data that the banks can leverage include transaction histories, patterns of spending, and historical investment patterns and preferences.

Generative AI technologies allow commercial banks to analyze the datasets mentioned above and suggest tailored solutions that the clients can adopt, such as budget optimization practices and effective debt management strategies, and also assist them in choosing the most appropriate investment option.

Moreover, commercial banks can rely on various generative AI technologies to help their clients develop an effective financial plan and implement the selected investment decision.

In addition, by relying on these AI technologies, commercial banks will likely enhance the accuracy of the investment advice given to their clients. This accuracy of advice, demonstrated over time with the clients, will cause increased loyalty and trust between clients and commercial banks.

Commercial banks can use various generative AI technologies like ChatGPT to improve their service efficiency by streamlining their back-office operations, considered the most critical aspect of commercial banks' operations. One way such technologies can intervene is by automating various processes. Automation of the documentation processes will likely save both time and resources currently spent on handling the huge volumes of documents for which commercial banks are responsible. It is possible to efficiently train technologies like ChatGPT to process generated documents while maintaining the safety and privacy of client data.

Moreover, automating the entire documentation process in the back office will likely provide the banks with an opportunity to flag any suspicious transaction with a high level of accuracy, thereby preventing potential financial losses. The benefits of such early and accurate fraud detection are obvious in the financial savings for both clients and commercial banks. By automating the documentation process, banks may save on the costs of managing physical documents and increase accessibility to such services.

The acceptance and utilization of different generative AI technologies will likely revolutionize commercial banks' practices to enhance their clients' experiences and quality of service delivery. Commercial banks must consider choosing various productive AI technologies in the market, like ChatGPT, which are specifically suited for their operations, to ensure they can reap maximum benefits from such AI technologies.

Ha Ji-ung is a student at Kyung Hee University.