The rise of Artificial Intelligence

A recent Roy Morgan Survey of 1,481 Australians, conducted in conjunction with the Campaign for Artificial Intelligence Safety, shows 57% of Australians believe that artificial intelligence creates more problems than it solves. Job losses and the need for greater regulation were sighted as the biggest reasons for this public opinion. Nik Samoylov, the coordinator of the Campaign for Artificial Intelligence Safety, concluded that the poll showed widespread community apprehension about artificial intelligence, especially when it comes to job security. Interestingly, one in five Australians surveyed believe artificial intelligence presents a risk of human extinction in the next twenty years.

As hesitant as some may be, many of us are enjoying surprising conveniences thanks to artificial intelligence, as it quietly and seamlessly permeates various aspects of our daily lives. Many of the everyday things we take for granted, are the result of this emerging technology. It’s the silent partner in our modern existence. Whether it's your smartphone's virtual assistant, the algorithms that curate your social media feed, self-driving cars, or medical diagnosis tools, it plays an increasingly huge role in our modern world.

So, what is Artificial intelligence?

Artificial Intelligence, often referred to as AI, sits at the intersection of computer science and machine learning. At its core, AI seeks to equip computers and machines with the ability to simulate human intelligence. This means AI systems are designed not just to process data but also to comprehend it, learn from it, and make decisions based on it. Think of AI as the bridge between human cognition and computational power. Through sophisticated algorithms, AI systems can perform tasks that typically require human intelligence, such as problem-solving, pattern recognition, speech and image recognition, language understanding, and decision-making. In essence, AI allows machines to think, reason, and act intelligently.

AI's main goal is to improve human abilities and productivity. Past challenges are being met with innovative solutions, setting the stage for a new era of information and increased efficiency. It really is incredible, but pretty mind boggling for most of us, and this is just the beginning.  

AI and your finances

Until recent years, managing finances has always involved a large amount of time and labour. Think back to when people would physically head into the local bank branch to withdraw cash for their living expenses, balance their cheque books, and had to manually track their spending in bank books.  

For many of us, managing our personal finances can be daunting, and is still a time-consuming task but we’ve come a long way from the days of knowing your local bank manager by name. Today AI-driven technology is revolutionising the way we manage, and optimise, our finances in ways previously unimaginable.

Have you noticed your banking app automatically categorising your transactions, tracking expenses, and summarising your spending habits? If you’ve ever received an alert that your account is overdrawn or that there’s potentially been a fraudulent transaction on your account, that’s AI hard at work.

Given we have unprecedented access to financial information, it should theoretically be a walk in the park for us to master the art of financial management. However, the same technology that empowers us also presents temptations that can work against our financial goals. AI-driven ads on our social media platforms and inundating our inboxes, have become increasingly effective in enticing impulsive spending and offering the allure of instant gratification.

Like anything, it’s about finding a balance on how we navigate this digital age, and harness the advantages, while being mindful of the pitfalls.

So, now you understand what AI is and how it’s already changing the way we manage our money, what now? We have all this information and insights at our fingertips, so how can we utilise it to make smart money moves?

Aside from keeping us accountable on our day-to-day spending and money management, AI-powered platforms can provide automated, algorithm-driven financial advice solutions.

Financial advice covers a wide range of wealth building areas, including retirement planning, tax strategies, debt management, investing, estate planning, and risk management. But until recently, there hasn’t been many options when it comes to how we access this advice.

A study conducted by research firm Investment Trends concluded that an estimated 12.6 million Australians have unmet advice needs, with the main barrier being the cost of advice. That’s 61% of Australians not engaging professionals to help them on their financial journey. However, the right AI technology can help bridge that gap. It can analyse your financial situation, goals, and risk tolerance to create a personalised recommendation, at a much lower cost to compared to traditional financial advice services. While it won’t replace the need for financial advisers, especially for complex financial situations, this solution provides options for the millions of Aussies, who without it, wouldn’t be able to access traditional financial advice.

The future of AI and personal finance

It’s evident that artificial intelligence is already transforming personal finance, making it easier for us to manage our money, invest wisely, and plan for our financial future. However, as with any emerging technology there are of course potential drawbacks and unintended consequences.  Risk of data breaches or privacy violations, as well as the possibility of bias in decision-making algorithms, should be carefully considered. 

While AI can provide valuable insight on your financial journey, it should be used to help make more informed financial decisions, not replace our own decision making altogether.  As AI continues to evolve, our financial well-being stands to benefit from its ongoing innovation and development, paving the way to achieving the most ambitious financial goals.