Technology is often thought of as cold and emotionless (no offence Bicentennial Man), but can it actually work in our favour to bring back a human side to money?
The idea of stepping foot into a bank and talking to, you know, a person is pretty foreign to our generation. Unless something really terrible has happened, it’s an increasingly rare occurrence to have a face-to-face chat with a bank teller. And thanks to online banking and the tap-and-go revolution, we’re all aware of the very real dread of checking our bank account in the morning and discovering that we’ve blown a week’s worth of rent on an average night out. Those twelve bottles of prosecco and that family pack of chicken nuggets were admittedly delicious, but really, again? I thought we worked through this.
Australians have never been richer, yet more people are in mortgage stress and we’re saving less than we did 30 years ago. By turning money into an abstraction—just little numbers floating on a screen, really—and taking out the physical interaction, it’s only made it easier to spend while, conveniently, the options for what to spend it on have exploded.
Enter Artificial intelligence (AI), which has basically democratised access to financial advice. AI is enabling banks to evolve from storage and loan facilities to purveyors of financial knowledge—without the having to ‘leave the house and talk to another sentient being’ bit.
Previously we’d have to pay big bucks to a personal financial advisor (which seems like a made-up concept just for rich people anyway?). Now, computers can get to know us through our spending, helping to better manage our finances. AI can track our spending habits and visualise, at the end of each pay cycle, where it all goes. Financial AI can also learn from your transaction history to help you, and your fiscally immature housemates, stay on top of your bills.
Apps that track your spending habits and assemble investment portfolios based on your financial profile and computer generated insights into the stock market could one day replace well-remunerated superannuation industry executives, too.
This not only helps us regain control over our money, but also makes the big banks work harder for our business.
Steve Worthington, adjunct professor at Swinburne, thinks AI will have an increasingly large role to play in personal finance. “At the moment in Australia we've got what you might call an erosion of trust in the traditional banking players or financial services players… So you could argue we're already looking for other ways of handling our personal finances.”
AI’s capacity doesn’t just extend to making money; it has also been used for security against hackers and cyber crime. The Australian Transaction Reports and Analysis Centre (AUSTRAC), the federal government agency tasked with preventing money laundering, organised crime and tax evasion among other high-crimes and misdemeanours, has developed AI capable of identifying legally suspicious transactions. AI is increasingly able to link transactions that would on their own appear perfectly innocent, but when taken together ring alarm bells.
Perhaps most unexpectedly is AI's ability to improve the customer experience. Data doesn’t have to mean depersonalisation. AI can learn about us in real-time and apply that knowledge to deeper and more intimate interactions than a customer service representative would be able to provide on the spot. We’ve all had those crap chatbot moments where the conversation is circular and you can tell you’re chatting to, well, a bot. But advances in chatbot technology will richen our experience with money.
A group of professors and a PhD student at the University of Michigan created a financial personal assistant that talks to you about your money in a conversational way. Jason Mars, one of the apps co-creators, wanted to be able to converse with an AI-driven application like he was talking to someone.
"Right now it’s simply too much work to check in on your financial status. For example, if you wanted to know, 'How much did I spend on that crazy trip I took to Orlando on bars?' I’d have to log on and look through my transactions and total things up," he told Forbes. "We wanted to create an experience where the user can push a button, ask a question without thinking about how they had to ask it, and get a precise answer.”
From simple stuff like making an inquiry to applying for a home loan, AI streamlines these interactions by getting rid of the middle man and the boring bureaucratic bits. According to a Gartner report, 85 per cent of customer interactions in the finance space will involve AI by 2020.
But this doesn't mean that the human element disappears, rather it becomes enhanced. AI's ability to dynamically accumulate, accurately interpret, and act on vast amounts of data means financial services will be delivered with an increasing level of personalisation and relevance to customers. In fact, it's AI and automation that will make customers ultimately be treated, and feel less, like just a number.
AI can help us better manage our finances and get results faster, so instead of looking at technology as being dehumanizing we should look at it something that can bring a sense of warmth back to cold hard cash.
This article is supported by Xinja, who are building Australia's first independent, 100 percent digital bank designed for mobile. You can join the waitlist here.