Artificial Intelligence technology is quickly becoming the biggest disruptor across business industries. ChatGPT brought A.I. to the mainstream, but rapid advancements in these chatbots have captured the attention of everyone from higher education to B2B technology companies to government regulators. We are still in the early stages of A.I. development and application, but how will it impact you? More specifically, how will A.I. impact your finances?
A.I. versus Online Search Engines
Think of a question. Now think of what you would type into a search engine to find your answer. With a search engine, you have one chance to find articles or information to answer your question. From there, you must search for the recommended results to gather accurate data.
Now think of the same question, but imagine a conversation with someone who already knows every bit of information on the internet. Imagine the back-and-forth discussion, which includes follow-up questions to provide more detail and clarity. Imagine being able to assign tasks like answering your homework problem or writing an article, email, or code. This is the difference between search engines and a natural language processing tool driven by A.I. technology. It allows human-like conversations to find the answer and complete the task.
Predictions on How A.I. Will Impact Your Finances
Financial literacy will improve with immediate access to accurate and intuitive answers to our questions. This will decrease time and effort barriers when learning. Most people lose interest when searching for a subject matter, digging thru articles, or reading books. This advanced learning curve will be applied everywhere, from financial literacy in school to understanding complex IRS codes.
Regarding identity theft prevention, unusual spending alerts from your bank or credit card company will become more precise. A.I.-powered detection tools are already starting to be used to prevent and detect fraud and identity theft. These continued advancements will help mitigate potential threats before they cause financial harm.
However, this same technology will also become a tool for the attackers. A.I. will increasingly become the backbone of cybersecurity for financial institutions.
Financial advisors often run a retirement analysis based on your current savings and projected spending in retirement. This predictive analysis generates a probability of financial success during retirement using a Monte Carlo analysis. The results of this analysis are only as accurate as the information inputted into the system. The ability to access your current spending habits, along with the future costs of these habits in a certain region of the country during your retirement years, will become standard. No longer will you need to calculate living expenses to track your budget.
Authorizing your advisor to access this information will become seamless, allowing real-time adjustments to your retirement analysis and enhancing the accuracy of the results.
Your advisor will also use this real-time automatic tracking to help prevent the adaption of poor spending habits.
Banks will use this information to track spending and automatically alert people when they reach a specific spending level in their accounts. The information will also be used to expand their free budgeting tools for customers, which will help them with targeted marketing-based spending habits.
For vacations, soon, you will be able to use A.I. to plan an entire vacation, given a specific spending limit. The software will create your itinerary, book your restaurants, and navigate your days based on your daily budget. A.I. will become your personal travel agent.
Summary
The impact A.I. will have on your finances is limitless. We are still in the early stages of development and adoption, and there are too many inaccuracies within the technology for widespread use, and improvements remain constant.
When it comes to A.I., our fear of humans being replaced by technology within the workforce will only increase. As much as this is possible for certain job roles, we believe most workers will use A.I. as a powerful tool for improving the efficiency and accuracy of job functions. Moving forward as a society, we will likely all lean into A.I. as a useful tool.
However, even considering all the benefits, we should remain cautious of this powerful technology. As technology advances, so does the lack of privacy and unlimited data sharing for the financial gain of others.
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We have helped our clients answer these questions and more. If you want a clear understanding of your financial future, and need help making changes to reach your goals, schedule a consultation and we can get started.
The material has been gathered from sources believed to be reliable, however Bedel Financial Consulting, Inc. cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. To determine which investments or planning strategies may be appropriate for you, consult your financial advisor or other industry professional prior to investing or implementing a planning strategy. This article is not intended to provide investment, tax or legal advice, and nothing contained in these materials should be taken as such. Investment Advisory services are offered through Bedel Financial Consulting, Inc. Advisory services are only offered where Bedel Financial Consulting, Inc. and its representatives are properly licensed or exempt from licensure. No advice may be rendered unless a client agreement is in place.
