ChatGPT and the banking business: Insights from the US stock market on potential implications for banks
Beckmann, Lars; Hark, Paul F.
Abstract
Technological advances in artificial intelligence, such as ChatGPT, promise significant potential for automation in the banking sector, but might also be associated with uncertainties and potential disadvantages for banks. By empirically analyzing US stock market reactions to ChatGPT’s launch, this study extracts the expectations of market participants to gauge potential future implications of ChatGPT for banks. The results indicate a significant negative stock market reaction of US bank stocks, with notable disparities between different bank types. Using cross-sectional regressions, we find that the negative market reaction is more pronounced for deposit-dependent and large banks.
Keywords
AI; Banking; ChatGPT; Event study; Financial intermediation; Large language model