ChatGPT – a cutting-edge artificial intelligence (AI) chatbot – debuted for testing on 30 November last year, and is astounding the world with its human-like, detailed answers to inquiries in real-time.
According to developer OpenAI, the software reached one million users within a week of its launch, and currently has more than 100 million users.
Where personal finance matters are concerned, how helpful – and accurate – is ChatGPT? Can you rely on a chatbot when it comes to taking care of your hard-earned cash?
ChatGPT is trained on a large amount of data, primarily from the internet, including Wikipedia, news articles, books, social media and journals.
The data is pre-processed and used to train the model’s parameters so that it can generate responses to various inputs, explains Shafeeka Anthony, Marketing Manager of JustMoney.co.za – a long-established site that helps educate South Africans to make good money choices.
AI is set to improve customer efficiency in banking, making the experience more personal and tailored, while chatbots provide general advice on topics such as budgeting, saving, and market analysis, enabling you to become more knowledgeable about money matters.
ChatGPT can, for example, help you to understand what credit scores are and how they are calculated. It can also provide you with tips and strategies for improving your credit score, such as paying your bills on time, keeping your credit card balance low, and avoiding opening too many credit accounts.
When asked for financial or investment advice, responses depend on the nature and phrasing of your questions. The ChatGPT feedback on a general financial query is:
“I’m sorry, but as an AI language model, I am not licensed to provide financial or investment advice. It’s important to note that investing involves risk, and it’s crucial to do your own research and consult with a licensed financial advisor before making any investment decisions.”
Anthony says it’s important to note that AI is not a silver bullet and must be used with care and caution.
“ChatGPT is designed to be more conversational and interactive than earlier AI models, so it can engage in longer, more complex conversations with users.
“It can help you to gain a general understanding of many personal finance concepts, such as budgeting and debt. This can be positive, as financial literacy in South Africa is below par compared with many other countries.”
A significant drawback, however, is that ChatGPT can provide responses that read very convincingly – but are factually incorrect. It also has limited knowledge of the world and events after 2021.
Anthony notes further, “ChatGPT’s suggestions may not be tailored to your specific financial situation. You should always consult a reputable professional before making any significant changes to your financial strategy. ChatGPT is certainly not a replacement for an experienced, human financial adviser.
“ChatGPT can provide you with information and guidance, but it’s ultimately up to you to take action and make changes to improve your financial situation.”
Anthony also warns that ChatGPT’s ability to converse easily with users, without spelling mistakes or poor grammar, makes it easier for hackers to set up sophisticated, convincing phishing scams.
- Read a JustMoney article on how to avoid common scams.
For these reasons, Anthony says, it remains advisable to deal with trusted, registered organisations in relation to financial matters.
JustMoney has been established for 16 years and offers articles, money management tools, and a wide range of financial products and services. Over 250,000 South Africans subscribe to the newsletter to stay informed and become financially savvy. Find the newly launched website here.