Ahead of its rivals, JPMorgan JPM has begun discussions with regulators in the United States about its generative artificial intelligence (AI) projects. The Wall Street giant is walking regulators through its AI pilot projects to ensure all controls are in place. The news was reported by Bloomberg.
Lori Beer, JPM’s global chief information officer, stated, “It's about helping regulators understand how we build the generative AI models, how we control them, what are the new vectors of risk. It's not only what we need to think about, but what they should think about.”
The bank has started testing AI applications that can generate earnings summaries for every company that JPM tracks as well as a helpdesk service that provides precise problem-solving steps instead of merely sending customers links to related articles to address an issue.
Beer said in an interview, “We're piloting, we're learning, we're figuring out. Based on what we learn, it's going to be the first half of next year at the earliest before we're ready to say anything is in production.”
Generative AI is a technology that can produce various types of content, including text, imagery, audio and synthetic data. It can summarize documents, write emails and churn out clever responses to users.
The buzz around generative AI is driven by the simplicity of new user interfaces for creating high-quality text, graphics and videos in no time.
In fact, the technology is not something new. It was after the release of ChatGPT a year ago that banks and financial institutions began hiring for AI-related positions.
For years, banks have spent billions of dollars to automate functions like trading, risk management, fraud detection and investment research. The rise of generative AI tools has pushed banks to develop new offerings.
In his annual shareholder letter, JPM’s chief executive officer, Jamie Dimon, called AI “extraordinary and groundbreaking” and said that AI could be integrated into every process of the bank’s operations.
Morgan Stanley MS and Goldman Sachs GS are two other banks of the many that have started using generative AI.
MS deployed an AI tool that allows its financial advisors access to its database of around 100,000 reports during client conversations. Likewise, GS uses generative AI to assist its developers in writing software code.
Over the past six months, shares of JPMorgan have rallied 7.8% compared with the industry’s growth of 4.6%.
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At present, JPM sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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