Across a range of industries, business leaders are embracing artificial intelligence as a transformational technology. In personal finance, AI can help address a longstanding issue: More than three-quarters of US consumers are uneasy about their relationship with money. Andreessen Horowitz professionals Olivia Moore and Anish Acharya conduct a detailed, insightful examination of how entrepreneurs are building innovative digital platforms that can streamline the consumer’s financial journey and bring greater transparency to money decisions. Financial professionals will find this a useful assessment of AI’s impacts on personal finance.
- AI solutions can simplify personal finance, which most people find complex and worrisome.
- AI can deliver customized experiences in financial information delivery, management and execution.
- Entrepreneurs are building AI platforms that automate consumer debt refinancing.
AI solutions can simplify personal finance, which most people find complex and worrisome.
Consumer finance is ripe for disruption, as fintech’s emergence in the 2010s verifies. Today, AI entrepreneurs offer new technology tools designed to put an individual’s “money on autopilot.” Consumers have a robust appetite for simplifying the handling of their personal financial affairs, including investment, retirement, savings, spending and debt management.
“Consumers don’t want to spend more time thinking about their financial situation. They want someone to fix it for them and, even better, to keep them on track over time.”
Some 77% of Americans say they feel anxious about financial decisions, and most people would prefer not to discuss money at all. Against this backdrop, entrepreneurs recognize opportunities to create the next generation of “digital personal financial manager” solutions using generative AI.
AI can deliver customized experiences in financial information delivery, management and execution.
These new tools will bridge the gap between providing financial intelligence to the consumer and taking the subsequent steps necessary to carry out their recommendations. This fundamental change automates people’s financial decision making and ushers in an era of “self-driving money.” Generative AI, in conjunction with “robot process automation,” streamlines financial analysis, processing and decision execution. Google, for example, has already released a platform, Bard, that uses AI to provide investment guidance.
“Essentially, this [super app] becomes an AI accountant and wealth manager for the masses, which not only sets you up for success but automatically reallocates your money as your life changes.”
Ultimately, AI could be instrumental in the development of a “super app” that would manage all of a consumer’s financial needs across different platforms, such as bank accounts, loans and brokerage activity.
Entrepreneurs are building AI platforms that automate consumer debt refinancing.
Financial products ripe for AI upheaval are those that consumers perceive as being difficult to navigate on their own. For example, refinancing debt from credit cards, personal loans and mortgages can be a daunting and onerous task. But the financial incentives associated with reducing borrowing costs or reworking terms are worthwhile.
“If users could automatically switch loan options, this could save them thousands (if not tens of thousands) of dollars over time.”
An AI platform could assess a borrower’s credit accounts and manage the entire process of application, cancellation, renegotiation and consolidation. AI can revolutionize and streamline a mechanism that is today mostly analog and manual. The established financial system generates substantial income from the current debt financing process, so this use of AI will most likely come from entrepreneurial ventures. Consumers will soon discover the financial rewards associated with AI-generated personal finance solutions.
About the Authors
Olivia Moore and Anish Acharya are professionals with Andreessen Horowitz .