One of the most significant benefactors of artificial intelligence technology is the finance and banking business. Chatbots, cognitive computing, machine learning, and personal financial assistants are all examples of artificial intelligence (AI) in finance and banking.
As technology becomes more prevalent, more banks and other financial institutions are focusing on artificial intelligence. This opens the door for AI to create new norms for personal money management by developing AI-based personal finance assistants. We’ll look at what makes AI apps suited for money management apps in this post.
The Current State of the Personal-Finance Segment
According to Statista, the total value of transactions in the personal finance market will be $1,092,496 million in 2019. Surprisingly, Robo-advisors are the market’s largest category, with $980,541 million in assets under management. The number of consumers utilizing Robo-advisors is expected to reach 147 million by 2023.
The global personal finance software market will reach $1,213 million by 2023, according to Allied Market Research, with a compound annual growth rate (CAGR) of 6.40 percent from 2017 to 2023. Despite the fact that web-based software will continue to lead, mobile app use is expected to rise as well.
A financial data management platform and personal financial management (PFM) apps are part of the mobile market category. These apps assist users in keeping track of their spending and making sound financial decisions. According to GlobalData, 61 percent of bank clients find personalized financial management suggestions helpful. The demand for PFM applications, like the demand for Robo-advisors, is likely to continue to rise.
Why do Financial Companies Develop AI Apps for Finance Management and AI-Driven Finance Assistants?
AI has the potential to take the finance sector to new heights. In a nutshell, AI discovers human data patterns in order to acquire insight into their addictions or repeated behavior. As can be seen, consumers become addicted to bad spending habits. They construct a list of what they will purchase, how much they will invest, and what they will not purchase one day. Another day, they found themselves addicted to buying pointless items.
If consumers integrate AI into their lives in the same way they use social media. AI will track their spending patterns, alerting them to their negative spending habits and advising them on how to replace them with positive ones. Artificial intelligence’s approach to aiding individuals in achieving their goals to adopt healthy financial habits which are of utmost importance in today’s world.
Main Features of AI-Powered Personal Finance Assistants
- PFM apps must be adaptable. You want your PFM software to work with you rather than against you, which means it must allow for flexibility in how money is saved and spent on a daily basis. Users should be able to see what they’re doing at a glance without having to browse through menus or buttons on the screen, which is why PFM apps should have an intuitive user interface.
- PFM programs should make it easier for consumers to save for particular objectives such as paying off debts, purchasing a home, and so on, by automating the process. This gives kids more time in their daily lives while still teaching them good saving practices.
- Personal financial applications powered by AI must provide advice based on data gathered from clients. PFM applications should be able to provide financial advice based on prior spending habits, and this information can assist consumers in better understanding their present financial condition. In addition, PFM solutions must be able to act proactively by providing messages or warnings in the event of a missed bill payment.
- PFM services must make budgets easily accessible, including breakdowns of how money is spent each day, week, and month, so users can keep track of their spending.
- Customers should be able to save time by paying bills automatically using PFM applications, so they don’t forget any due dates and end up with late fees and fines.
- AI-powered personal finance applications should employ all available technologies, such as geolocation and GPS, to ensure that users of PFM apps know where they’re going before making a purchase or saving plan.
- PFM apps should be able to track all of their users’ spending patterns in order to warn them of potential problems, such as running out of money while on vacation.
- PFM applications require tools that allow them to be flexible in how individuals save money so that they can figure out what works best in terms of saving for certain purposes such as debt repayment.
Key Benefits of Artificial Intelligence Financial Applications for the Financial App
The fundamental premise behind personal finance applications is that AI will assist you in managing your finances. Make no mistake: an AI personal financial assistant handles funds better than humans because it makes data-driven judgments rather than emotional ones. Unlike humans, AI decision analytics in finance is unconcerned with impulse purchases; an AI assistant is completely logical. It prefers to stick to savings objectives and encourages consumers to do so as well.
A personal financial AI program may also identify fraud. Because AI financial applications have access to a user’s bank accounts, they can issue an alert if any questionable behavior is detected. In other words, AI can detect when a user’s behavior differs from their usual pattern, such as when they utilize a card in a different way.
Examples of AI-powered Financial Assistants
Olivia AI
Olivia AI is a financial conversational assistant powered by machine learning techniques. She connects to a user’s bank accounts and offers real-time cost information. Olivia analyses expenditure patterns and makes recommendations based on her findings.
Olivia is simple to get along with because of her excellent discussion engine. The Olivia app is also incredibly safe, owing to Touch ID, 256-bit encrypted communications, and cloud-based data storage.
Digit
Digit is a personal finance app driven by artificial intelligence. It connects to bank accounts and analyses spending trends, just as Olivia AI. Digit also uses predictive analytics to help with personal money management. It can help you save money by determining the best amounts to send to a savings account.
The Bottomline
The introduction of personal finance assistants is a means for firms to reach closer to their customers. That is why several financial institutions are developing AI helpers. Users may better manage their money and learn wise financial behavior with the aid of an AI-powered personal financial app. An AI assistant anticipates users’ costs and suggests methods to save money thanks to predictive analytics in personal financial management. Furthermore, an AI program may assist in the detection of fraud as well as the automation of cost management.