But it’s no longer relegated to sci-fi movies – AI is here now. It’s accomplishing tasks which couldn’t be imagined a decade ago. AI is being used to drive cars, analyse legal documents and even diagnosing cancer. In a lot of cases, it is better than humans.
What I’m more excited about is what AI can accomplish tomorrow – especially when it comes to personal finance. The ramifications of this can’t be overstated. It will change the way people budget, manage their risk, save for superannuation and engage with their financial needs.
In countries like Australia with high levels of tech adoption, young people have no qualms with this change, given that this group has grown up in a technological age and readily accepts it. They are the frontrunners in this change and are already benefitting from it. But if we want mass adoption of this tech that holds such staggering potential, especially when it comes to finances and risk management, we need to ensure the wider public trusts it, across all demographics.
A survey from Weber Shandwick found that globally, people tend to trust robots to provide them with reminders to take medicine, provide directions and give entertainment. But fewer were happy for it to provide health advice, perform a surgical procedure or drive a public bus. It seems when the stakes are high we still want to default to people to take on the task. Changing this mindset is particularly important in Australia. While financial literacy is high overall, it is unevenly distributed and those on lower incomes and education levels are less educated on how to manage their finances.
NAB’s ‘Financial Resilience in Australia’ 2015 report found that 48 percent of people have only a ‘basic understanding’ of financial products and services, with more than nine per cent reporting they have ‘no understanding.’ Most people with very low levels of economic resources were found to be more likely to have low levels of financial knowledge.
The beautiful thing about AI is, with its low cost of entry and ability to scale, it will democratise the ability to interrogate finances, creating better financial literacy for all. What will aid in this development is greater innovation from companies and support for them as part of our national agenda. The next frontier for this technology is scale. If we’re to trust it with one of our most valuable resources as individuals – our money – we need to grow increasingly comfortable with it.
The other factor will be the evolution of AI. Not only will machines become smarter but the way we interact with them will be different as well, as we carry our mobile phones nearly everywhere. Companies are already toying with voice interaction as a way to make AI communication more efficient and more human. Facebook recently announced an open-source research platform for chatbot developers called ParlAI, designed to make conversational AI a reality. The idiosyncrasies around natural language mean this isn’t an easy task, but the Amazon and Google have shown the technology exists today and is always improving.
At Acorns, we’ve started to explore the use of machine-learning technologies, with the launch of MyFinances; a product which analyses a user’s spending habits and identifies patterns and savings opportunities. Since we opened it to the public a little over three weeks ago the uptake among the more than 250,000 Australians who have already downloaded the Acorns app is astounding. It shows AI may only be in its infancy but the appetite among users is there when the utility is clear.
All of these advances will make AI more natural to us – and make society in general more able to accept the idea of entrusting the management of their finances with a machine. The most exciting thing is it’s not in some far away future. The ability for AI to change the way engage with our bank accounts is on the brink of our reality – and not a minute too soon.