AI is also finding its way into a variety of personal finance apps offering smart budgeting and expense tracking. One example is Wally, a budgeting app that offers what it calls WallyGPT. It’s a chatbot service that will make personalised suggestions for you based on your own financial behaviour that it tracks in the app. It is able to predict monthly expenses and create a savings plan.
On the spending front there are apps overseas that can help people reduce energy bills. If we did that here it would be PowerSwitch on steroids. AI could be used in the likes of PriceMe and PriceSpy to automatically direct us to better shopping deals and scour the internet for discounts or rewards.
It can offer strategies to manage and pay down debt. In the near future we will see AI approving loans and offering better credit scoring.
Eventually more all-encompassing AI apps will emerge that can interact with our entire financial lives helping manage our budgeting, spending, debt banking, financial planning, investing, insurance, and estate planning.
On the spending front, AI algorithms can analyse your past behaviour and preferences to suggest products or services tailored to your interests. This can enhance shopping. If I’m searching for something obscure that I need to buy, then that’s great. But it can also put stuff I don’t need in temptation’s way.
I heard psychologist Paul Duignan speaking about AI and social media at an event at Devonport Library. His thoughts about there being no social media free lunch rang a chord with me. The real cost of free social media is the bombardment of advertising. “At the moment Facebook says ‘I’m going to make you buy stuff’, says Duignan.
“At some point we’ll be able to pay to be in control of the algorithm. You will be able to say to it: ‘I want to save money’, or ‘I want to be better with the kids’,” says Duignan “And then the algorithm which you’re paying for will manipulate you into being the person you want to be.”
Another thing that AI is starting to do, which isn’t good for consumers in my humble opinion, is dynamic pricing.
Instead of an item being sold at a fixed price, every user is shown a different price according to their emotional response to adverts. The AI then creates the illusion of scarcity or urgency by generating limited-time offers and promotions. These tactics can push us to make impulsive buying decisions.
AI can be positive, or negative for our finances and also downright scary. On the positive side, banks are already using AI to spot potentially fraudulent patterns or unusual account behaviour.
On the scary side, scammers are using AI to simulate voices.
Imagine this. You get a call from your “daughter” who happens to be in Europe. It’s actually a scammer, who has found a recording of your daughter’s voice on her TikTok channel. Using that clip the scammer fakes your daughter’s voice.
You believe you’re speaking to your daughter who asks you to transfer a few thousand dollars or more to an account immediately. As an aside, the way around this is to have a secret code word with family, that your real daughter would know.
Finally, AI is coming. Being forewarned is being forearmed.
