ChatGPT, a generative Large Language Model
developed by Artificial Intelligence research laboratory
OpenAI, has received widespread attention and
acclaim since its launch. Compared to traditional
dialogue models, ChatGPT utilises a massive amount
of data to train the model, allowing it to obtain a
stronger understanding of natural language and
generate more fluent dialogue according to the
context. The integration of technology in the field of
finance is an inevitable aspect of the social division of
labour, driven by advances in science and technology.
ChatGPT will undoubtedly expand the use of AI
applications in the field of finance, greatly promoting
reform and aiding financial institutions in serving the
economy. The banking industry should strive to make
full use of the opportunities brought about by such
programmes in order to accelerate the implementation
of various beneficial applications such as personalised
customer service, multilingual translation, intelligent
financial management, sentiment analysis, improved
customer experiences, automatic risk assessment,
and fraud detection. However, at the same time,
the industry must be aware of the risks that may
accompany AI implementation.
New challenges
The banking industry has faced new and increasing
challenges in recent years, of which one of the
most significant is protecting customers from fraud.
According to the Hong Kong Police Force, the number
of fraud cases in Hong Kong has increased significantly
in recent years, up 45% in 2022 year-on-year.
Investment scams and telephone scams cost huge
sums each year - HKD 1.8 billion and HKD 1 billion
respectively. Finding ways of detecting and preventing
fraud has become one of the greatest challenges that
banks face today.
AI has allowed fraudsters to greatly increase
their success rate. In the past, fraudsters often
impersonated organisations such as public security
bureaus, procuratorates, courts, government
officials, etc, taking advantage of the victim's panic
to defraud them. In the present day, scammers
can use AI models to generate fake voice and
video messages that mimic real organisations. For
example, the Baotou police in Inner Mongolia,
China, recently shared a typical case on their public
account. The fraudster first stole the WeChat
account of the victim's friend, and then used AI to
impersonate the friend's face and voice, successfully
defrauding the victim of 4.3 million yuan in 10
minutes.
When using AI tools like ChatGPT, data and privacy are
easily leaked. Due to the low awareness of financial
information security of some users and the lack of
rules for the use of large-language models in specific
banking scenarios, fraudsters may use the data leaked
to carry out targeted fraud.
New opportunities
While AI technologies such as ChatGPT bring about
new challenges for banks, opportunities also arise.
ChatGPT can aid banks in conducting anti-fraud
operations by:
- Detecting anomalies. By analysing a large
amount of data regarding the historical
transactions and behaviour of customers, it can
effectively learn the behaviour of consumers,
identifying abnormal transactional behaviour and
reducing potential risk of fraud. For example, if
a customer suddenly and unexpectedly transfers
a large amount of money from their account
to an unfamiliar account, the programme can
alert the bank, which can then issue alerts
and warnings, freezing the transaction before
gaining confirmation from the customer, thereby
reducing the chances that the customer will be
scammed or defrauded.
- Analysing behaviour. Through examining data
detailing a customer's behaviour and conversations,
ChatGPT is capable of understanding the user's
background and needs, so as to better assess
whether a transaction performed by the customer
is a risk, and if it is, how large a risk.
- Automating the handling of customer queries and
reports, thereby improving the efficiency of a bank's
anti-fraud operations.
- Providing customers with 24/7 services. For
example, the AI-based automatic duty system of
the Agricultural Bank of China Suzhou Branch
circumvents the limitations of traditional manual
monitoring, being capable of providing functions
such as real-time monitoring and alerts, achieving
around-the-clock customer service.
- Assessing the authenticity of information. Through
analysing the authenticity of videos and messages,
ChatGPT can determine whether there are
instances of fraud, thereby preventing customers
from incurring losses.
AI technology has been increasingly applied in antifraud
in recent years. For instance, the "AI police
officer" deployed in China's Yuhang District, Zhejiang
Province, makes use of technologies such as intelligent
speech, semantic recognition, automated processing
and big data analysis to carry out anti-fraud activities.
The introduction of these "AI police officers" has led
to a 71.4% decrease in fraud cases, and a reduction
in case loss of 95.1% in the region. Banks, then, must
make good use of emerging AI technologies in order
to improve their ability in anti-fraud activities and
better serve their customers.
This is a condensed version of an AIFT article.
For full version:
https://hkaift.com/chatgpt-challenges-and-opportunities-in-anti-fraud-operations-for-banks/
