The way AI is progressing has surprised everyone and the way it changes the Finance function.
There is no doubt that this trend will continue and that we will see new tools and innovations in 2024 even more.
We, at the AI Finance Club, spend a lot of time each day to keep on track and deliver all of the valuable things to our members so they stay on the top in their work.
Therefore, we’ve prepared a collection of valuable insights of the world of AI for Finance.
Table of Contents
Collection of AI Terms and their Finance Use Case
1. GPT (Generative Pre-trained Transformer)
• Definition: General-purpose language models
• Finance Use: Automated Content Generation, Customer Support Chatbots
2. NLP (Natural Language Processing)
• Definition: Enables computers to understand human language
• Finance Use: Chatbots, Fraud Detection
3. API (Application Programming Interface)
• Definition: Rules enabling software interaction
• Finance Use: Data exchange, Real-time market data, Payment Processing
4. RPA (Robotic Process Automation)
• Definition: AI automating rule-based tasks
• Finance Use: Data Entry, Invoice Processing, Account Reconciliation
5. OCR (Optical Character Recognition)
• Definition: Extracts text from images or scanned docs
• Finance Use: Automated document processing, expense management
6. ASR (Automatic Speech Recognition)
• Definition: Converts spoken language to text
• Finance Use: Transcription, Customer Service Call Analysis
7. CL (Clustering)
• Definition: Groups similar data points
• Finance Use: Market Segmentation, Fraud Detection
8. TTS (Text-to-Speech)
• Definition: Converts written text to spoken word
• Finance Use: Audio Financial Reports, Customer Notifications
9. LLM (Large Language Model)
• Definition: AI trained on vast text data
• Finance Use: Sentiment Analysis, Document Summarization
10. DL (Deep Learning)
• Definition: Specialized ML using deep neural networks
• Finance Use: Analyze market data, predict patterns
11. ML (Machine Learning)
• Definition: Enables learning from data
• Finance Use: Credit Scoring, Algorithm Trading
12. RNN (Recurrent Neural Network)
• Definition: Processes sequential data
• Finance Use: Time-Series Analysis, Stock Price Prediction
13. SVM (Support Vector Machines)
• Definition: Used for classification & regression analysis
• Finance Use: Credit Risk Assessment, Portfolio Optimization
14. KNN (K-Nearest Neighbors)
• Definition: Classifies data based on neighbors
• Finance Use: Customer Segmentation, Anomaly Detection
15. TKN (Tokenization)
• Definition: Replaces data with unique symbols
• Finance Use: Information Extraction, Sentiment Analysis
16. PCA (Principal Component Analysis)
• Definition: Reduces data dimensionality
• Finance Use: Risk Management, Feature Extraction
17. GAN (Generative Adversarial Network)
• Definition: Neural networks creating realistic data
• Finance Use: Synthetic Data Generation, Anomaly Detection
18. Naive Bayes
• Definition: Classification with predictor independence
• Finance Use: Risk Management, Customer Segmentation
19. KM (K-Means)
• Definition: Organizes data into k-clusters
• Finance Use: Market Segmentation, Fraud Detection
20. BChain
• Definition: A decentralized & distributed ledger technology
• Finance Use: Secure & transparent financial transactions, smart contracts, & reducing fraud
21. DWH
• Definition: A centralized repository streamlining analysis by consolidating diverse data sources
• Finance Use: Unified Data Storage, Business Intelligence, Regulatory Compliance
22. Epoch
• Definition: A single pass through the entire dataset during machine learning training, used to update the model’s weights
• Finance Use: Model Training, Algorithmic Trading.
ChatGPT User Guide for Finance
All of the things you need to use ChatGPT for Finance efficiently.
ChatGPT 3.5 VS 4
ChatGPT is available through their website or iPhone/android app.
Free Basic access offers limited features, while Plus and Professional subscriptions unlock advanced capabilities like longer chat sessions, memory retention, and fine-tuning.
ChatGPT 3.5
• Good at text generation, translation, and question-answering
ChatGPT 4
• Enhanced accuracy, reasoning, & multimodal capabilities (Image recognition, upload/download files like PDF and Excel)
Account Creation
- Browse ChatGPT then click “Sign-up”
- Use your email address or Google account, Microsoft account, or Apple account
- Create a password and click Continue
- Head to your inbox and click the verification link
- Verify your Phone Number
How to Prompt?
• Precise Language: Use specific, unambiguous terms for clarity.
• Contextual Information: Include relevant background to provide a comprehensive understanding.
• Creative Phrasing: Explore different ways to frame a question from varied perspectives.
• Analogies and Examples: Use comparisons to simplify complex financial concepts.
10 Advanced Prompting Techniques
- Agent Prompting: Framing prompts to make GPT act as an ‘agent‘.
- Explicit Reasoning: AI details its process or reasoning in a clear, step-by-step manner.
- Chain-of-Thoughts: Breaking down a complex query into a series of simpler, logical steps.
- Chunking: Complex information broken down into smaller, more manageable ‘chunks’.
- Prompt Optimization & Expansion: Start with a basic prompt and ask the AI to improve it.
- Team Prompting: Simulates a collaborative team environment using multiple agents.
- Socratic Prompting: Asking questions that lead the AI to explore a topic deeply.
- Fact Checking: Using prompts to verify the accuracy and credibility of information.
- Meta Cognition: Prompting involves encouraging the AI to reflect on its own thought process.
- Iterative Inquiry & Sequential Questioning: AI asking you questions, instead of you asking the AI.
Navigating The Interface
• Send Message: Submit your Query
• Tools: Access Python, DALL-E, browser, etc
• Settings: Adjust preferences, data options
• History: View past conversations
• Help: Guidance and FAQs
Advanced Features of GPT4
• Web Browsing: ChatGPT 4 can browse the web and give you the links of the sources he used when it comes from the web.
• Interactive Tools: Access tools like Python to code and DALL-E to generate images.
• Create Your Own Bot: With GPTs you can customize your own assistant or use assistants created by others.
• File Upload/Download: Upload Images, PDF, Excel files for analysis and you can even create Excel files.
Troubleshooting
1. Tips for Unresponsive or Unclear Answers:
– Rephrase Your Question
– Provide Context
– Use Explicit Language
– Check Input Quality
2. How to Refine Questions:
– Break Down Complex Queries
– Specify Parameters
– Ask for Clarifications
3. Easy Steps to Report Issues:
– Use the Feedback Option
– Provide Specific Examples
– Detail Your Expectations
ChatGPT CheatSheet
Compilation of most valuable use cases of ChatGPT for Finance.
Writing
Use ChatGPT to prepare your writing communication:
• Emails
• Memos
• Instruction
• Presentations
• Speech
• Dunning Letter
• Cover Letter
• Minutes
• Report
• Checklist
• Action Plan
• Executive Summary
• Agenda
• Proposal
• Template
• Press Release
• Project Plan
• Policy Document
• User Manual
• Financial Statements
Draft Procedures
Use ChatGPT to draft procedures for you:
• Invoice Approval Procedure
• Expense Reimbursement Protocol
• Monthly Closing Checklist
• Budget Management Guide
• Payroll Processing Workflow
• Cash Handling Manual
• Financial Reporting Framework
• Tax Compliance Procedure
• Vendor Management Policy
• Internal Audit Guidelines
• Credit Management Procedure
•. Debt Collection Protocol
• Capital Expenditure Approval Process
• Fixed Asset Management Policy
• Investment Evaluation Procedure
• Financial Forecasting Guide
• Fraud Prevention and Detection Protocol
• Purchasing and Procurement Procedure
• Financial Risk Assessment Framework
• External Audit Coordination Procedure
Financial Analysis
Use ChatGPT to help your Financial Analysis:
1. Cost analysis
2. Pricing analysis
3. Liquidity analysis
4. Revenue analysis
5. Cash flow analysis
6. Sensitivity analysis
7. Profitability analysis
8. Break-even analysis
9. Financial ratio analysis
10. Working capital analysis
11. Debt and equity analysis
12. Budget variance analysis
13. Capital structure analysis
14. Capital budgeting analysis
15. Financial statement analysis
16. Investment appraisal analysis
17. Risk assessment and analysis
18. Cost-volume-profit (CVP) analysis
19. Financial performance benchmarking
20. Return on Investment (ROI) analysis
Problem-Solving
Use ChatGPT as a second brain to help you find solutions for complex problems:
1. Risk mitigation ideas
2. Tax liability reduction
3. Vendor management
4. Inventory optimization
5. Cost-saving strategies
6. Cash flow optimization
7. Cost driver identification
8. Cost allocation optimization
9. Capital investment decisions
10. Capital expenditure approval
11. Capital structure optimization
12. Working capital management
13. Sustainable finance initiatives
14. Financial performance metrics
15. Financial controls improvement
16. Financial reporting improvement
17. Financial modeling enhancement
18. Foreign currency risk management
19. Financial forecasting enhancement
20. Financial performance enhancement
Tool Teacher
Use ChatGPT to be your dedicated tool teacher:
• Word
• Excel
• Outlook
• PowerBI
• Powerpoint
• PowerQuery
• SAP
• Xero
• Sage
• Oracle
• Netsuite
• Anaplan
• Bloomberg
• Quickbooks
• Thomson Reuters
• Microsoft Dynamics
• SQL
• HTML
• Python
• Javascript
Other Helpful Cases
Use ChatGPT for these other use cases:
• Simplify complex finance topics
• Structure your financial storytelling
• Explain legal terms
• Summarize long documents
• Generate datasets
• Research best practices
5 Ways to Use ChatGPT in Finance
Chatgpt has a lot of use cases for Finance, but we will point to the top 5.
1. Instant Expertise
On-the-spot insights
Knowledge from countless finance texts, methods, and strategies.
2. Tool Mastery
If you are struggling with Excel or PowerPoint, you can get step-by-step guidance from ChatGPT.
3. Tailored Analysis
From Profit metrics to data interpretation.
ChatGPT helps you craft tailored analysis
4. Productivity
Save multiple hours per internal procedure you have to write.
5. Improved Communication
Draft a document, a complex email, or a report.
Turning jumbled thoughts into clear concise messages.
10 Prompt Techniques
More than 3,000 learned from us how to use ChatGPT for Finance.
Here are the most important techniques you need to master:
1. Incremental Prompting
Explanation: Asking a series of related questions to build towards a complex understanding or solution.
Finance Example: Starting with revenue data requests, then moving to cost analysis.
2. Providing Examples
Explanation: Demonstrating the expected output or behavior with concrete samples to guide AI responses.
Finance Example: “Build the cash flow statement of Q2 2023 following the Q3 example”.
3. Avoiding Negative Prompts
Explanation: Framing requests positively to avoid misunderstandings and incorrect AI outputs.
Finance Example: “Identify the profitable divisions” instead of “Which divisions are not losing money?”
4. Chaining Prompts
Explanation: Sequencing prompts to create a logical flow of information, mimicking a thought process or analysis.
Finance Example: Sequentially asking for departmental budgets to consolidate them.
5. Refining by Iteration
Explanation: Continuously tweaking prompts to enhance AI’s output accuracy, mirroring an iterative review process.
Finance Example: Iteratively refining forecast models based on different scenarios.
6. Chunking
Explanation: Dividing complex information into smaller, more manageable segments for better AI analysis and output.
Finance Example: Breaking down a complex budget review into section-by-section assessments.
7. Complex Prompts
Explanation: Crafting detailed prompts that handle multifaceted tasks, similar to comprehensive financial analysis.
Finance Example: “Prepare a report that evaluates the ROI of marketing spend by channel over the past year & suggest budget allocation for Q3”
8. Comparative Prompts
Explanation: Setting up prompts that make the AI compare datasets, akin to comparative financial analysis.
Finance Example: “Compare Q3 profits to Q2 and explain the variance in terms of operational efficiency.”
9. Hypothetical Scenarios
Explanation: Instructing the AI to explore the consequences of potential financial decisions or changes, like scenario analysis.
Finance Example: “If interest rates rise by 2%, how does that impact our loan repayment schedule?”
10. Agent Prompts
Explanation: Assigning the AI a role or persona to better align its responses with a specific viewpoint or set of knowledge.
Finance Example: Acting as a tax auditor, “Review the last fiscal year’s returns for compliance with the new tax legislation.”
ChatGPT for CFOs
CFOs can highly benefit from using ChatGPT and help their Finance team.
Here are 30 ways that ChatGPT can help CFOs:
Increased Productivity
1. Create emails in seconds
2. Correct wording
3. Summarize a document
4. Formulate instructions
5. Research terms & definitions
6. Simplify a complex text
Instant Tutorial for Tools
1. Excel
2. PowerPoint
3. Outlook
4. PowerBI
5. SAP
6. Quickbooks
Create Performance Plans
1. Sales analysis
2. Vendor management
3. Process improvement
4. Cash flow optimization
5. Inventory reduction
6. Cost cutting
Strategic Decision-Making
1. Market analysis
2. Investment evaluation
3. Capital structure optimization
4. Mergers & acquisitions analysis
5. Product profitability analysis
6. Research new opportunities
Stakeholders Communication
1. Budget guidance
2. Request input
3. Prepare a meeting
4. Earnings calls preparation
5. Sustainability reporting
6. Financial education training
Last Words
In wrapping up, the landscape of finance is undergoing a remarkable transformation, propelled by the relentless advancement of AI.
As we stand at the brink of 2024, the fusion of finance and AI is not just a fleeting trend but a fundamental shift in how financial processes and decisions are made.
At the AI Finance Club, we’re not just observers but active participants in this evolution.
Our dedication to mastering and leveraging AI tools like ChatGPT means we’re not just keeping pace; we’re setting it.
This journey with AI is redefining the very essence of financial practices—from the way we analyze market data to how we interact with clients.
It’s a world where efficiency and innovation are not just goals but realities, where the complexities of finance become more accessible and manageable.
As AI continues to mature, its role in finance will only deepen, promising not just advancements in existing applications but the potential for entirely new paradigms in financial strategy and operations.
For our members and the broader finance community, this means an exciting path ahead, filled with opportunities to harness AI’s power for unprecedented growth and success.
Join our AI Finance Club if you want to keep learning about ChatGPT for Finance and stay in touch with the latest advancements in AI for Finance.