By Steve Wells, Rohit Talwar, Alexandra Whittington, April Koury, and Maria Romero

Would you trust a robot with your money?

The Potential Impact of AI on Personal Banking

After President Trump and Brexit, artificial intelligence (AI) is perhaps the hottest topic of debate around the world. There are many ways in which this most disrespectful technology could change how we might save, spend, and invest in the future. To help understand its life-changing potential, here are ten ways we have identified for how AI might impact and enhance our experience of personal banking:

1. Enhanced Security and Fraud Protection—By monitoring every transaction as it happens and comparing it to historical patterns, AI could identify fraud in progress, such as the customer’s personal bank account being drained. Equally it can detect warning signs; the customer’s financial advisor being unavailable, changing their spending habits, and buying one-way flights to the Bahamas, for example.
2. Go Compare on Steroids—Artificial intelligence could take the concept of price comparison websites to new heights. Collating different legally accessible savings and loan options from across all providers around the world, an AI finance supermarket tool could instantly identify financial products that meet the client’s requirements precisely, highlighting pertinent small print, and exposing hidden costs. Through an ongoing subscription, this continuous comparison tool could make recommendations to the customer or be authorized to switch financial products automatically as better options emerge.
3. Spending Comparison and Budgeting—AI would allow us to compare the spending of individuals, households, and businesses. Various views could be available, for example how much do we spend on electricity, food, stationery, or transport relative to people with similar incomes, households of the same size, or comparable businesses to ours.
4. Aggregated Purchasing—A bank could aggregate customer purchase information on an opt-in basis and use it to secure higher discounts from providers based on the total spending power of its customer base. Deals could be offered by vendors, with customers’ personal AI assistants deciding whether to buy based on learned needs and interests—only consulting with us when the AI doesn’t know enough to make a choice.
5. Dynamic Fund Management—The AI systems could look at estimated future spending based on past behavior and move bank customers’ spare cash into whichever savings or investment products offered the best return based on the level of risk the client was prepared to take. Options might range from a stable interest-bearing account to highly volatile digital currency funds.
6. Digital Currency Trading—With growing investor interest in digital currencies like Bitcoin, Litecoin, and Ether, banks could trade the funds clients allocate to this asset class—buying and selling on a dynamic basis as currency values fluctuate or tracking the choices of the best cryptotraders.
7. Financial Equality—While individuals with limited funds may not be able to pay for a human financial advisor, AI may become the great financial equalizer. Constantly declining technology prices would enable literally everyone to access the best AI investment advice at almost no cost.
8. Dynamic Pricing—Based on past behavior data, AI could predict what price each individual would consider fair. Prices would be public, but each individual would only see those customized just for them.
9. The “Jiminy Cricket” of Personal Budgeting—Smart systems would nudge us to make the best decisions for our financial situation. For example, for most 20-somethings, instead of spending a month’s salary on Friday night, it would encourage more modest entertainment options and invest the rest to help achieve our holiday or retirement goals. The AI might go a stage further and add a small auto-saving amount to each purchase—automatically squirreling the funds away at each purchase.
10. My Digital Banking Twin—Our personal AI clones or “digital twins” would be authorized to buy, save, sell, or trade on our account. Credit card purchases, bank transactions, bill payments, completing student loan or mortgage applications, and even impulse buys could all be delegated to our digital twin. These transactions would be conducted under the watchful eye of the bank’s own AI Big Brother to make sure a digital twin doesn’t go rogue, get hacked, or collude with another to defraud their human counterparts.

Personal Finance Reshaped

The applications of AI are nigh on limitless and we can expect to see them proliferate in the marketplace over the next few years. Some may thrive, others may be absorbed by larger institutions, the majority will end up as a failure statistic like most technology start-ups of the past, but the ideas will live on in a constantly transforming personal finance landscape. The fun part is trying to pick the winners and convincing our own providers to up their game and bring a little AI spice into our financial lives.

• Where would you most like to see AI being used in the management of your finances?
• Which are the financial situations where you’d still require a human touch?
• What are the biggest benefits and risks that you can foresee from greater use of AI in managing your finances?

This article is excerpted from A Very Human Future – Enriching Humanity in a Digitized World. You can order the book here.

A version of this chapter was originally published in The Money Pages.