Beyond the Hype: Exploring ChatGPT`s Role in Banking
Beyond the Hype: Exploring ChatGPT`s Role in Banking

Author(s): Dan Costin Nitescu, Adina Elena Călin, Vanesa-Daniela Ungureanu, Eugen-Marian Vierescu
Subject(s): Social Sciences
Published by: Udruženje ekonomista i menadžera Balkana
Keywords: AI; Banks; ChatGPT; Risk; Event-study
Summary/Abstract: The accelerated digitalization of banking organizations in the post- Covid-19 world holds the promise for increased efficiency in customer service, fraud detection or risk management. Artificial intelligence has a significant potential to transform the way banks operate, but can it be assigned a primary role in banking transformation, or will it be the co-pilot for human-centered change? By empirically analyzing the European investors` reaction to ChatGPT`s launch, this research explores the market expectations and potential impact on banking organizations. Using an event-study methodology and cross-sectional regressions, the results emphasize an immediate market concern, signaling vulnerabilities and challenges related to artificial intelligence’s impact on banking operations, especially for large systemic banks. The paper contributes to a better understanding of the potential of ChatGPT technology and the need to leverage its advantages while adapting risk management.

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