Artificial intelligence (AI) has been around for quite some time, but it’s adaptation in the last few years has been moving quickly.
We now see it being applied in technologies that we use daily such as search engines, our phones, voice assistants, self-driving cars –you name it.
The world’s biggest financial institutions are spending millions to invest in AI so it won’t be long before we see its full implementation in financial transactions from making cardless withdrawals to getting financial advice.
Let’s take a closer look at how AI is changing the way we handle our money.
1. Convenient Banking
Banking is about to become even more easier as the years pass. Up until now, some banks require their customers to appear in person to make certain transactions such as changing their address, making large withdrawals, or applying for loans.
With AI however, these services are beginning to slowly migrate to mobile. With biometrics used as identification and security, customers can easily verify themselves through their mobile phone and perform sensitive transactions. In these instances, fraud is less likely to happen since AI is a continuously learning program that remembers the user’s behaviors. If something seems out of place, AI prevents it right away and performs a second verification to ensure the customer’s identity is accurate.
2. AI Financial Advisors
It seems like the stuff of futuristic movies but it’s already becoming reality. Rather than getting a human financial advisor, humans can make decisions based on the advice given to them by an AI advisor. They give solutions based on the data they’ve collected on the customer and provide services that best fit their goals and situation.
One app that does this is MyEva. It looks at the customer’s financial health and provides product recommendations based on the user’s responses. It constantly feeds on data and gets smarter with every interaction. It’s also smart in a sense that if a question is too complex, it connects the user to a human who can better provide advice.
3. Better Risk Assessment
In line with financial advice is the ability to assess risk better. Most people get into debt because they get loans and pay premiums that they couldn’t afford to pay and maintain. AI looks into the person’s financial history and provide them with more appropriate financial solutions that best fit their risk profile. AI can recommend insurance premiums or mortgage plans that customers are more likely to skip and not default on. It can even provide investing advice and recommend stocks based on how high or low risk the person is willing to take.
4. More Cashless Transactions
We are already experiencing more cashless transactions than ever but it’s about to become even more ubiquitous with AI around. Financial apps now make it easy to pay for goods and services online. With purchases made in person, cashiers can simply scan the QR code from the phone app and it’s done.
Most personal finance gurus will advise against cashless transactions since you feel less of the sting when you don’t feel physical cash parting from your hands. But the bright side of this payment method is that people are able to monitor their transactions more closely. They can get a better insight on their spending, and as mentioned above, AI can help them prioritize their spending focusing more on paying debt rather than spending their savings.
5. Personalized Interactions
Because AI is always learning the customer, we can expect more personalized interactions when doing finances. People will be more likely to use services that benefit their situations rather than going about aimlessly with personal finance advice that may not always work to their benefit. Customers can get answers to financial questions real time with AI chatbots; this in turn helps them to make smarter financial decisions faster.
What do you think of these changes? Share your thoughts in the comments below.