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Could ChatGPT Really Be Your Next Financial Coach?; Interview with Bronwyn Syiek, President of Credit Sesame

Could ChatGPT Really Be Your Next Financial Coach

ChatGPT accumulated over 100 million users within  just two months, and opened people’s eyes to the vast possibilities of artificial intelligence (AI). But chances are most of us are already using AI in our online banking practices – does your bank’s app require a face ID to log in? Does your credit card already analyze your spending habits and offer suggestions on how to find savings? So what’s coming down the fintech pipeline for our own good… Could ChatGPT really be your next financial coach? 

In this TechBullion interview with Bronwyn Syiek, President of Credit Sesame, we will be exploring this first platform to provide free and ongoing access to consumers’ credit scores. We will also chat through the future of AI and how it will help with personal finance management in the near future.

Please tell us more about yourself?

My name is Bronwyn Syiek, and I’m the President of Credit Sesame and a member of the Finance Committee of Oxford University Press. Previously, I was President of NASDAQ-listed QuinStreet, a pioneering online marketing and media business that focused on deep expertise in select industry verticals, including financial services. 

I pride myself on an absolute focus on customer value, and I  believe strongly in the active development of value-driven cultures which, at Credit Sesame, means plenty of laughter while we work.

What is Credit Sesame? Could you give us a walkthrough of the business and the services you provide?

Credit Sesame is a financial wellness platform leveraging the latest technology, AI and analytics to help consumers achieve financial health and stability and create better opportunities for themselves and their families. We do this by offering services that work to improve our customers’ credit scores, increase their approval odds, lower their cost of credit, save money and get credit for their everyday debit purchases. We know that strong credit health leads to better financial health and stability, and our app helps accelerate consumers’ credit and financial wellness in one place. 

What is trending in the credit report industry? Could you give us an overview of the credit report market size and how artificial intelligence is influencing the industry?

Credit bureau and credit rating agency revenue has increased by 2.9% CAGR over the last 5 years and is projected to be $14.8 billion in 2023. This reflects a general trend in the industry to make credit information and credit reports more accessible. In parallel, consumers are increasingly savvy in their approach to achieving and maintaining their credit scores. The Fair Credit Reporting Act gives consumers the right to get free copies of their reports at least once every 12 months. The credit reports themselves can be difficult to understand. 

Banks have used machine learning for years, for example to predict fraud. Already, many financial institutions use AI to provide personalized recommendations to customers, ranging from spending, savings and investment advice to credit card offers. In the future, AI-powered suggestions are expected to become even more accurate and tailored to individual needs. The significant change exemplified by ChatGPT is the incorporation of natural learning processing (NLP). This allows the AI to converse with customers in a human-like fashion without predefined input requirements or answers. The end result could be an experience more akin to discussing finances with an expert personal finance advisor who knows his customer really well. This should result in truly unique advice and, perhaps more importantly, automation of actions based on individual preferences and  instructions.

How is AI helping financial institutions in fraud detection and prevention?

By analyzing transaction history, user behavior and other data, AI algorithms can identify suspicious activity and alert customers and financial institutions to potential fraud. In the future, AI-powered fraud detection is expected to become even more advanced. For example, AI could analyze transaction history and user behavior to identify patterns of fraud that are specific to certain types of transactions or user profiles. This may help financial institutions prevent fraud before it occurs and so protect their customers from financial losses.

On the issue of customer services, what role is ChatGPT playing, how is AI improving customer services for financial institutions?

Chatbots are used to provide quick and efficient customer service, already. In the future, AI could improve customer service using natural language processing to understand customer inquiries and provide helpful responses. Machine learning algorithms could identify patterns of customer inquiries and provide useful information even before they ask for it. This could help to reduce wait times and improve the overall customer experience.

Could you enlighten us more on how AI and machine learning algorithms are enabling better risk management? 

AI algorithms can identify potential credit risks and prevent defaults, already. AI-powered risk management is likely to become even more sophisticated, using predictive analytics to identify potential risks before they occur. For example, by analyzing transaction history and user behavior to identify potential instances of fraud or default. Additionally, AI could use machine learning algorithms to identify patterns of risk and make recommendations on how to manage those risks.

How does ChatGPT provide personal financial coaching advice and recommendations and besides those mentioned above? What other financial roles can it play for both personal and institutions?

The real future of AI is its application as a tool for creating personalized advice that takes into account an individual’s current financial circumstances and future goals. AIs have the ability to process large amounts of data from disparate sources depending on the algorithm and techniques used, for example. With personal finances in mind, an AI can already or could:

  • Recognize patterns in spending behavior by analyzing data from credit card transactions, bank statements, and receipts. The analysis may help identify where the user may be overspending and suggest ways to cut back.
  • Integrate financial data from multiple sources, such as income, expenses, and investments, into a single dashboard providing a comprehensive view of an individual’s financial situation.
  • Cleanse data by identifying and removing inaccurate or incomplete data from financial sources. For example, it can flag duplicate transactions or identify errors in bank statements, improving the accuracy of financial reports.
  • Use predictive modeling techniques to forecast future spending and savings trends based on historical data. This can help users plan their finances and set achievable goals.
  • Analyze unstructured data, such as financial news articles and social media posts, to identify trends and provide personalized investment advice based on the user’s interests and risk profile.
  • Detect unusual activity in financial data, such as fraud or identity theft, and alert the user to take corrective action. For example, identifying unauthorized credit card transactions or suspicious changes to bank account information.

What are the possible pitfalls and downsides to using AI for personal finance management?

As I mentioned, AI could be an extremely effective tool for customized advice for personal finance, but like any technology it can’t replace human interactions; AI doesn’t have the ability to understand human context. For example, different families and individuals may have different constraints and factors that influence their financial decisions, and similarly, different cultures have varying perspectives on finances that AI can’t account for.

Additionally, there is always a risk of data security and breaches when combining personal financial information and technology. ChatGPT is designed to safeguard users’ personal information and data, but a recent study indicated there is a risk of the chatbot sharing phone numbers, email addresses and other personal details.

Finally, AI is only as good as the information it learns from. If information is incomplete or incorrect, the advice and recommendations may not be relevant. Ask ChatGPT in May 2023 about the treatment of medical debt on credit reports, for example, and the response mentions nothing about the April 11, 2023 announcement that the three major reporting agencies have removed medical collection debt with an initial reported balance of under $500. The CFPB estimates that at least one medical collection has been removed from the credit reports of 22.8 million people. ChatGPT did not have access to this information. Of course, AIs used by finance companies are powered by the most recent data available, but this illustrates the pitfalls of using incomplete or old data and information.

How is Credit Sesame leveraging artificial intelligence? Do you have any use cases and success stories to share with us?

We use AI to analyze customer credit reports and financial data so we can offer:

  • Personal credit and credit building insights
  • Personal financial planning tips and suggestions
  • Personalized recommended actions
  • Tailored financial product recommendations
  • Credit score estimation after recommended actions

Our success stories come from our customers and we have hundreds of thousands of 5-star reviews on the App store.

Credit Sesame has lots of new initiatives in the pipeline. Our aim, as always, is to make credit management even easier, more transparent and effective for our customers. That’s all I can say for now

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