Can You Trust ChatGPT for Borrowing Advice?
You can’t miss the online chatter about ChatGPT. The AI-powered chatbot created by OpenAI has made headlines for its ability to help you do almost anything — from creating a work of art to becoming your virtual assistant. Depending on where you get your news, you may have also heard it’s a perceptive financial advisor.
While the natural language processing tool is a nifty chatbot that can generate responses in a blink of an eye, AI has its limits within a financial context.
On the backend of fintech services, AI can crunch an unfathomable amount of data points at a time. For a lender like Fora Credit, AI gives them the ability to view a consumer’s application and see how countless financial variables interact with each other to determine creditworthiness.
But for the average borrower, the powers of AI have been greatly exaggerated. Of course, there’s no harm in asking the chatbot some questions, but be wary of the answers it gives. Here are some reasons why you can’t trust ChatGPT to help you make any decisions about your next personal loan.
It Doesn’t Provide Up-to-Date Information
According to OpenAI’s very own FAQ, ChatGPT has limited knowledge of the world and events after 2021. This admission obscures the truth, suggesting that it’s still in the process of learning events as they happen.
In reality, ChatGPT may learn from user input to refine its responses, but its current iteration will not deliver up-to-the-minute information.
Earlier this year, OpenAI launched the use of plugins that would boost the bot’s powers by accessing third-party knowledge databases, including the Internet. However, the average Joe will not have access to these plugins at first. The waitlist prioritizes developers and people who pay for the premium ChatGPT Plus.
Initial reports also reveal that these third-party sources may not always meet most users’ standards. WebGPT, an experimental system that predates these plugins, harvested information from sites that weren’t credible. Security researchers also believe these plugins may increase your risk of fraud.
It Doesn’t Provide Accurate Information
While it might generate content that sounds authoritative, it has issues that go above and beyond relevancy. ChatGPT can confidently make claims that are incorrect or untrue.
Sometimes, it’s a result of not understanding the prompt you send. Depending on what it thinks you’re asking, it can fabricate hypothetical statistics to sound more trustworthy. Other times, it simply makes generalizations using out-of-date information.
Once again, according to OpenAI’s FAQ section, the bot may occasionally produce harmful instructions or biased content. As a result, they recommend double-checking any claim ChatGPT makes against reliable sources.
Compare this to genuine financial resources — whether you’re visiting a government site, a credit organization, or even an online lender like Fora. Financial consumer protection framework regulations are in place to ensure these companies provide accurate information online. There are also provisions against making false or misleading representations about products, including lines of credit.
No such laws regulate ChatGPT — for now. The EU AI Act, which takes aims at the chatbot, is one step closer to being enacted.
It Can’t Provide Customized Advice
Financial advice goes above and beyond the black-and-white of the balance book. Human advisors can take into account the human element, as emotions can play a significant role in money management.
Human advisors can also take into account the complexities of an individual’s unique personal financial situation and goals. They consider multiple factors when planning the next step, including risk tolerance, personal goals, and time restraints.
ChatGPT, on the other hand, has no such nuance. It cannot understand the emotional factors at play in money management, nor can it provide certified financial advice tailored to a specific situation.
The Takeaway:
While ChatGPT is the most advanced chatbot of its kind today, it’s still a chatbot. The free version is used best as a support device that helps you generate generic emails, calculate figures, or summarize lengthy text. When it comes to important decisions like borrowing money, it can’t give you advice.
This article has been published in accordance with Socialnomics’ disclosure policy.
