Is AI Tech The Future of Personal Finance Management?

sharka on 07/11/2023 - 21:46

Hey OzB Community,

I've been reading up a lot on AI technology and its applications in personal finance. With AI tools designed to optimize savings, investments, and even offer financial advice, I'm tempted to try them out but a bit hesitant.

Are any of you using AI for managing your finances? Keen to know if they actually make a noticeable difference, or is it just another tech fad? Also, any heads up on privacy concerns would be ace.

Looking forward to your insights and experiences with this tech leap!

Financial Artificial Intelligence

Comments

  • Bomba on 07/11/2023 - 21:48
    +1

    The use of AI in personal finance is growing and has shown substantial promise in helping individuals manage their finances more effectively. Here's an overview based on current trends and knowledge up to April 2023:

    Benefits of AI in Personal Finance:
    1. Automation: AI can automate repetitive tasks like categorizing expenses, which saves time and reduces human error.
    2. Personalized Advice: Based on your spending habits and financial goals, AI can offer customized advice to help you optimize your savings and investments.
    3. Investment Management: AI-driven robo-advisors can manage investment portfolios, often at a lower cost than traditional financial advisors.
    4. Fraud Detection: AI systems can quickly identify unusual activity in your accounts which may indicate fraud.
    5. Budgeting and Forecasting: Advanced algorithms can help forecast future spending and saving needs, allowing for better financial planning.
    User Experiences:

    Many users have reported that AI tools have positively impacted their financial management by simplifying decision-making and offering insights that they might not have considered otherwise. These tools can analyze vast amounts of data to identify trends and provide recommendations that are beyond the scope of manual analysis.

    However, the effectiveness of these AI tools can vary based on individual financial situations, the complexity of the financial portfolio, and the sophistication of the AI system itself.

    Privacy Concerns:
    1. Data Security: Financial data is sensitive. Ensure any AI financial service you use has robust security measures to protect your data.
    2. Data Sharing: Some AI services may share your data with third parties for various reasons, including improving their services or marketing. It's important to read their privacy policy carefully.
    3. Control Over Data: Consider how much control you have over your data, including the right to delete it.
    4. Regulatory Compliance: Check if the service complies with financial regulations and data protection laws like GDPR or the CCPA.
    Tips for Using AI in Personal Finance:
    • Start with a small amount of money until you're comfortable with the platform and its recommendations.
    • Regularly review the AI's performance and decisions to ensure they align with your financial goals.
    • Keep informed about how the AI makes decisions with your money, understanding its logic can be critical.
    • Maintain a healthy skepticism; AI can provide suggestions, but it may not always fully understand your unique life context.
    Conclusion:

    AI in personal finance isn't just a fad; it's a tool that, when used wisely, can significantly aid in financial management. However, it's important to approach it with an understanding of its capabilities and limitations, especially regarding privacy and data security. As with any financial service, due diligence is key before fully committing your finances to an AI-managed service.

    [Generated with ChatGPT]

    • sharka on 07/11/2023 - 21:54
      +4

      Love it! Using AI to generate a response to an AI question..

    • Ozbar Gain on 07/11/2023 - 22:59

      This sucks

  • elgrande on 07/11/2023 - 21:55
    -3

    AI is a fad, a farce, a failure.

    • yewman on 07/11/2023 - 21:58

      Wrong, I use it at work many times a day. It's replaced a search engine for me, and it will probably be the downfall of Google.

      • elgrande on 07/11/2023 - 22:00

         I use it at work many times a day

        What line of work are you in?

        • yewman on 07/11/2023 - 22:02
          +3

          Potato farmer

      • CrowReally on 08/11/2023 - 09:39

        Type "African countries that start with K" into Google and have a read of the wonderfully confident response the AI gives you, confirming that there aren't any, but the closest is "Kenya".

      • KangaDrew on 08/11/2023 - 10:06

        It won't be the downfall of Google. If anything, it will simply be incorporated into Google (if it's not already).

    • jugsy on 08/11/2023 - 09:50

      Which AI-based products are you referring to

  • TSH on 07/11/2023 - 22:01
    -1

    If your finance AI is modeled off some greedy, white, fat cat, predatory CEO types, then sadly no.

  • ginormousgiraffe on 07/11/2023 - 22:17
    +1

    I think it will replace self service and general advice within the next decade.

    • CrowReally on 08/11/2023 - 09:44

      It's the equivalent of going down to the bank and collecting one each of the "what are shares?" "What are term deposits?" pamphlets and reading each of them in turn.

      Ask it a question like you would a (human) financial adviser like "okay so which one is right for me" and it'll go

      "There are advantages to investing in shares and also advantages in investing in term deposits. For instance, shares may offer inspiration credits that can reduce a tax assessed amount, while term deposits traditionally offer lower returns but with greater liquidity".

      A technically correct response but doesn't help humans outsource their need for advice.

      • ginormousgiraffe on 08/11/2023 - 13:26

        It can definitely get more detailed than that, but it comes down to keeping the advice general in nature.

        The vast majority of the population does not regularly see advisers anyway, so these AI tools will allow FIs to allow users to self serve with far more detail than we currently get.

        • CrowReally on 08/11/2023 - 13:36

          I don't follow the logic behind the last paragraph. AI is okay for providing general/generic advice to people who wouldn't be going to an advisor anyway? What problem is this solving? It feels like messaging only people who haven't booked in to a skin specialist to tell them to remember to wear a hat when they're in the sun.

          Surely you're going to see a financial advisor because you want financial advice that's tailored to your personal circumstances. Something a human can do and an AI absolutely can't?

        • CrowReally on 08/11/2023 - 13:42

          Also, there's rules about who can and who can't provide financial advice. Are you going to charge a fee to use this service? Who gets "in trouble" if the advice isn't correct? If the service is free, how are they making money?

          Etc.

    • pharkurnell on 08/11/2023 - 10:43

      I think it will replace self service

      I cant see it fueling up my car very well

  • AustriaBargain on 08/11/2023 - 10:02
    +3

    AI is the future of everything. Even fi you still rely on a human expert, they will be relying on AI themselves on top of their knowledge and experience. The reminds me of Pandoras box, a box of charm beads my mother bought from Pandora, she opened it upside down and the charms went everywhere, under the fridge, under cabinets, hundreds of them everywhere. No way to find them all and put them back in.

    • KangaDrew on 08/11/2023 - 10:09

      Always listen to Zeus and never open Pandora's box, or all hope will be lost.

  • verio on 08/11/2023 - 10:52

    Any financial software that operates based on accessing your banking records and does not require your input will be limited in terms of accuracy.

    Think about your next $100 that you are going to spend on Amazon or eBay. Do you know what it will be? Will it be a video game, groceries, household, cosmetics or something else? You have no idea. Could be anything.

    This is the problem with the software approach, all your bank can see is a merchant name. Automatic categorisation is dumb, it cannot figure this out just based on that without your input.

  • TSH on 09/11/2023 - 17:57

    The main role of AI is to keep spoon feeding us feces while reminding us to smile.
    Like that scene in Elysium where Matt Damon is talking to a Bot.

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