Democratizing Financial Knowledge with ChatGPT by OpenAI: Unleashing the Power of Technology

26 Pages Posted: 2 Feb 2023

See all articles by Thomas Yue

Thomas Yue

MechaniX Limited

David Au

MechaniX Limited

Chi Chung Au

MechaniX Limited

Kwan Yuen Iu

Independent

Date Written: February 2, 2023

Abstract

This paper discusses the potential of using Explainable AI (XAI) and language models, such as ChatGPT, in revolutionizing the communication of financial knowledge to non-financial professionals. We tested the capabilities of ChatGPT in interpreting XAI models and explaining complex financial concepts in a non-technical manner. The results show that ChatGPT has great potential as a tool for making complex financial concepts accessible to a wide range of target audiences. To the best of the authors’ knowledge, we are the first to present an approach to combine the method of Explainable AI (XAI) using SHAP with a conversational AI model, ChatGPT, to explain the predictions made by a nonlinear black box machine learning model in Finance. This paper also identifies the limitations of ChatGPT for explaining model predictions, but it is expected that the improvement of the prompt engineering aspect of the model will overcome these limitations. Ultimately, the use of ChatGPT has the potential to level the playing field and empower all individuals, regardless of their financial background, to make informed investment decisions.

Keywords: Finance and technology, investment, inequality, trading, ChatGPT, OpenAI, explainable AI, SHAP, XAI, black box model, machine learning, trading strategy, hedge fund, quantitative trading, factor loadings, style factor

Suggested Citation

Yue, Thomas and Au, David and Au, Chi Chung and Iu, Kwan Yuen, Democratizing Financial Knowledge with ChatGPT by OpenAI: Unleashing the Power of Technology (February 2, 2023). Available at SSRN: https://ssrn.com/abstract=4346152 or http://dx.doi.org/10.2139/ssrn.4346152

Thomas Yue (Contact Author)

MechaniX Limited ( email )

14/F, Manning House,
38-38 Queen's Road Central
Hong Kong
Hong Kong

David Au

MechaniX Limited ( email )

14/F, Manning House,
38-48 Queen's Road Central
Hong Kong
Hong Kong

Chi Chung Au

MechaniX Limited

Kwan Yuen Iu

Independent ( email )

United States

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