AI finance apps set to disrupt advice sector and automate money decisions - The Prosperity Project

Financial tracking apps could soon effectively be acting as a financial adviser in your pocket – as AI innovations transform what they’re capable of.

Instead of just tracking your spending, saving and investments, advances internationally are increasingly seeing the apps able to do everything from scanning the market for better deals or returns, to making recommendations and then executing them on your behalf.

Josh Daniell, the co-founder of Akahu – which connects bank accounts to third-party tools like tracking apps – told Nadine Higgins on The Prosperity Project financial apps are rapidly evolving.

“What the AI will be able to do is cut through all the marketing nonsense and just look at what is actually the best financial product for you, and for nearly everyone that will not be your current financial products,” he says

He believes it has huge potential to help people achieve better financial outcomes. “So my sort of long arc of hope for how AI is going to disrupt things is that it will reduce the inertia for people being in the most optimal financial product”

Daniell says you could soon be talking to your finances, and getting AI to do the heavy lifting “It could be, please scan the market and tell me if I should be using different financial products than what I’ve got currently, and if so, help me sign up to those new providers”.

However, it does raise significant legislative challenges, because providing personalised financial advice is a regulated activity in New Zealand.

“A lot of products will try to stay on the other side of that line … but chatbots generally are trying to be more helpful than that. They are trying to personalise their recommendations or their advice,” he says.

“It’s all happening so fast that I’m sure a lot of regulation is actually being breached.”

But Daniell suggests introducing regulation ahead of innovation could stifle its potential, meaning regulators may be forced to take a wait-and-see approach.

“With AI moving so fast, I think it would be possibly the wrong move to try to regulate … we don’t know enough yet to make those calls, and we might just hamper the potential to innovate,” he says.

That level of access required also raises obvious concerns about security, trust and privacy.

“When it comes to AI, what are the boundaries of what you give it access to, and can we trust it to stay within those boundaries?” he says, but “that is a much bigger question than how this works in financial services - it’s a question for AI generally”.

Watch or listen to the full episode of The Prosperity Project for more.

The Prosperity Project is hosted by Nadine Higgins, an experienced broadcaster and financial adviser.

Follow the show at iHeartRadio, Apple Podcasts, Spotify or wherever you get your podcasts. New episodes are released every Monday.