Artificial intelligence will affect every part of our lives, including savings, investments, and budgeting, experts say.
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Artificial intelligence is booming right now, and some analysts say it’s the most important theme for Big Tech this year.
New AI-based products and technologies are emerging all the time, and their impact will grow from here, including in the financial world.
You might expect a chatbot to answer when you try to contact your bank online, or an automated answer when you call. But experts say AI’s impact on money and investments could be much more far-reaching.
Professor Bonnie Buchanan of the University of Surrey told CNBC Make It: AI is already playing a role in everything from savings to retirement planning, budgeting to credit score, insurance to trading, she says.
Sarah Coles, head of personal finance at Hargreaves Lansdowne, adds that users are often unaware that AI is involved.
“For example, banks use AI to track spending and automatically alert you when your account reaches a certain level. and also warn users of potential fraud,” she told CNBC Make It.
But experts say this is likely just the beginning.
One way Coles sees AI expanding in personal finance is by providing more targeted and specific support in financial planning, for example.
“By using AI to improve information targeting and ensure people get just the information they need when they need it, they are more likely to engage.”
Kimberly Dillon, vice president of brands at AI-powered financial services app Cleo, also sees potential for new money management tools.
“We will be able to understand how people save and spend their money and adapt quickly. It allows us to better assess if it benefits someone,” she told CNBC Make It.
Buchanan takes it one step further. “Of course, the metaverse is also evolving. Many banks and financial services providers have established a presence in the metaverse,” she says.
“In the not-too-distant future, with the help of VR/AR [virtual reality/augmented reality] A device that allows people to enter the metaverse for their banking, insurance and wealth management needs. ”
These money management changes could make finance more accessible and inclusive, protecting customers from financial harm, experts say.
“It provides an opportunity to significantly improve access to the help people really need,” says Coles.
For example, banks may be aware that certain customers are often in debt or short of cash, which could help them offer advice to remedy the situation before it spirals out of control, she suggested. doing.
Dillon adds that AI-based technology can also help create personalized budget plans that help people get out of such situations.
Buchanan says convenience also plays a role. For example, chatbots can often conduct basic financial transactions, and AI tools can ring alarm bells if fraud is suspected, she explained.
But there are also risks. Data security is one of them, according to Buchanan.
“Big data underpins many AI personal financial applications, but there are risks. What if your personal financial data were hacked or stolen?” She brings up a risk factor that Coles is also concerned about. Such confidential information requires careful protection, the latter added.
Financial literacy is another area that could be negatively impacted. “There is a risk that people will choose to rely too heavily on these tools without building a proper foundation for their education,” Dillon said.
This can be dangerous because people may not know what’s going on with their money or use products they don’t understand and may not suit them or their situation. Experts explain that there is
And even with AI, it’s important to understand your money. Because someone’s financial situation is often “down to hundreds of small decisions that are made every day.”
This includes understanding the role AI plays in managing money, adds Buchanan. “I see both financial literacy and digital literacy as necessary skills in the increasingly complex financial markets,” she said.
Ultimately, therefore, a hybrid approach might be the safest bet, suggests Coles.
“The best solutions include automating what can be automated, providing human support that can add real value, and giving people the information and support they need to make the best possible financial decisions. includes,” she concluded.
