Finance and artificial intelligence are not like oil and water. There are mixed areas, like expense reports. But when it comes to generative-AI applications such as OpenAI’s ChatGPT, one financial institution takes a pass.
This week, there were reports that JPMorgan Chase & Co. restrict staff to using the ChatGPT chatbot. The company’s mandate was not made in response to a specific event, but rather as part of standard controls for the use of third-party software, the Telegraph reported. JPMorgan did not immediately respond to my request for comment.
Launched in November by OpenAI, ChatGPT is a chatbot that can answer questions and generate content on any topic you can think of, and even write articles. It is trained to follow human-like language and thought patterns. (Read more about OpenAI founder Sam Altman here.)
To discuss ChatGPT in the workplace, I spoke with Vikram R. Bhargava, assistant professor of strategic management and public policy at the George Washington University School of Business, who conducts research on AI and the future of work.
“I think that many of us, including people who work in finance, were very surprised by the performance of ChatGPT when we first played with it,” said Bhargava. “Some employees and even banks may be tempted to use these tools to make their lives easier,” he said. For example, ask to come up with an Excel formula suitable for modeling tasks that analysts or associates can do, he explained. But not knowing how the technology works, “do not make a little bit of worry in too much depending on it,” he said.
“The thing with banking, of course, is that it’s a very regulated industry, and this technology is also new to regulators,” said Bhargava. Along these lines, Mira Murati, chief technology officer at OpenAI, said Time in a recent interview that regulators should engage with ChatGPT and regulate the use of AI in a way that is “consistent with human values.”
“I don’t know the specifics of the reasoning behind JPMorgan’s decision, but I think it’s wise,” Bhargava said. “This technology is developing very quickly. One of the difficulties is – what can be applied in ChatGPT, may not be correct in three months.
JPMorgan is no stranger when it comes to AI The bank was recently ranked No. The index covers the 23 largest banks in North America and Europe. JPMorgan spends $14 billion on technology annually, about half of which is dedicated to investment, the company said in an announcement.
“Being a leader in AI and knowing how to use AI responsibly, sometimes requires companies to stop using the technology they’re given,” Bhargava said.
Michael Schrage, a researcher at the MIT Sloan School Initiative on the Digital Economy, spoke to the chief financial officer at fortuneThe CFO Collaborative event in January was about the possibilities of generative AI in finance. I asked him his thoughts on JPMorgan’s reported limitations.
Schrage says he’s not sure how OpenAI currently manages, collects, and analyzes “instructions” (how you make ChatGPT do what you want it to do). But he suggested the question could be problematic for banks concerned about privacy rules, compliance, and proprietary processes. Instructions that are too detailed may inadvertently reveal information that the bank or client would prefer not to share, Schrage said.
“In the same way that Google and Bing know what topics, themes, and names people are searching for, it is likely that OpenAI will also track the level of detail and specificity of directions,” he said.
Again, Schrage isn’t sure how OpenAI handles and tracks directions, but says: “It’s easy to imagine and create a way for directions to be anonymized, aggregated, masked, and protected to minimize sensitive information while still getting good ‘generative suggestions’ and insights.” I reached out to OpenAI to ask for directions, but have yet to receive a response.
Many CFOs have been cautious and experiment with AI And, it will be some time before they ‘d feel comfortable integrating ChatGPT, Alexander Bant, chief research for CFOs at Gartner, recently told me.
What will make financial institutions more open to ChatGPT? “They need less security to understand how the use of this technology interacts with the current regulatory environment,” Bhargava said. But are there some tasks a company can do without being reprimanded by the Securities and Exchange Commission?
“Let’s say there’s an entry-level employee on your team who can’t write the clearest and most concise email,” Bhargava explains. “So, using ChatGPT can facilitate clearer communication.”
The jury is still out on ChatGPT’s application to finance, but generative AI is nowhere to be found.
Have a great weekend. See you on Monday.
Sheryl Estrada
sheryl.estrada@fortune.com
big problem
Hyperproof, a SaaS-based compliance and risk management company, has released its 2023 IT Compliance and Risk Benchmark Report. The company found that security, compliance, and risk management professionals are more concerned with short-term and immediate threats, rather than dealing with larger decisions like security issues long term. Respondents said their No. 1 concern was cybersecurity risk (36%), followed by third-party risk (29%), and a lack of support and resources dedicated to IT risk and compliance (24%). The study also found that companies are prepared and ready to improve their risk and compliance management processes in the coming years.
Deeper
Here are some of Fortune’s weekend predictions:
“The housing market correction has cost homeowners $2.3 trillion,” by Lance Lambert
“These are the top cybersecurity startups to watch in 2023, according to VCs,” by Lucy Brewster
“The ‘free money’ tech investment is over and the ‘old economy’ is set to be the big winner, according to Bank of America,” by Will Daniel
“These 5 sleep habits can add 5 years to your life, experts say,” by L’Oreal Thompson Payton
Leader board
Here’s a list of some of the key moves this week:
Sandeep Singh Aujla promoted to CFO at Intuit Inc. (Nasdaq: INTU), the global financial technology platform that makes TurboTax, Credit Karma, QuickBooks, and Mailchimp, effective Aug. 1. Aujla has held senior finance positions at Intuit for seven years and is currently SVP of finance for Intuit’s largest business unit, Small Business and Self-Employed Group (SBSEG), and for the Intuit technology organization. Michelle Clatterbuck, who has been CFO since February 2018, plans to step down as CFO on July 31.
Joanne Knight was promoted to CFO at Cargill, a global food company that provides agricultural and financial services. Knight is currently Cargill’s acting CFO. Prior to this role, he was VP of finance for Cargill’s agricultural supply chain company, including its ocean transportation and world trade groups. Prior to Cargill, Knight spent 10 years in finance, marketing, and business leadership roles at General Mills that included P&L responsibilities. He also held finance leadership roles at Wachovia.
Robert Higginbotham appointed interim CFO at Foot Locker, Inc., effective March 1, according to the company’s 8-K form filed on February 21. Higginbotham will serve in this role in addition to his current duties as SVP of investor relations and financial planning and analysis, a role he began in December 2022. The company continues its search to identify a successor to current EVP and CFO Andrew E. Page who will depart on February 28. Previously, Higginbotham served as VP of investor relations.
Ryan Clement was promoted to CFO at SelectQuote, Inc. (NYSE: SLQT), an insurance sales agency. Clement was named interim CFO in May 2022. Prior to joining SelectQuote in January 2022 as SVP of financial planning and analysis, Clement served as CFO of Sifted (formerly VeriShip). Prior to Sifted, Clemen spent seven years at Edelman Financial Engines, where he served in various senior-level finance and operational positions.
David Rudow named CFO at Unite Us, a software company that enables cross-sector collaboration. Rudow will lead the finance organization Unite Us. He most recently served as CFO at nCino taking the company public in 2020. For more than 20 years, Rudow served in senior leadership positions, including SVP at CentralSquare Technologies and senior analyst roles for several leading investment banks and asset management companies.
Kevin Schubert named CFO at Rubicon Technologies, Inc. (NYSE: RBT), a digital marketplace for waste and recycling, effective immediately. In addition to his current responsibilities as president, Schubert will now oversee Rubicon’s financial operations. Prior to becoming the company’s president, Schubert served as Rubicon’s director of development. Prior to joining Rubicon, he held senior executive and advisory roles with public companies, most recently, CFO for Ocean Park Group.
Hear
“I have all the respect for [Fed Chair Jerome] Powell, but the fact is we are losing control of inflation.
— JPMorgan Chase CEO Jamie Dimon said in an interview during CNBC Halftime Report.