How AI can improve your Wealth Wisdom

“If you want overall financial security, including covering your home loan, go for a term insurance plan. If you only want to ensure your home loan is paid off in case of any casualty, choose a loan protection plan. Always compare different plans before deciding.”

The above AI chatbot-generated advice on an insurance-related query is just a step toward democratizing financial education. According to a 2020 report by Global Financial Literacy Excellence Center, only 24% of the Indian adult population is financially literate. Fortunately, AI-powered chatbots can help in increasing financial education and empower people to make smarter investment decisions.  Still wondering how? Let us read what Kunal Anand, Chief Operation and Customer Services Officer, Aviva India, has to say on this matter.

How can AI solve this problem at a basic level?

Building a strong foundation of financial literacy is crucial for making smart investment decisions. However, teaching finance and financial terms can be daunting at the basic school level, given the complexity of the subject matter. Fortunately, AI is here to help. By personalizing financial education, it can make learning engaging and enjoyable for young minds. This can be done by using interactive simulations to simplify complex concepts. For example, these simulations can help students understand the basics of budgeting, credit, and debt management. This approach can help students understand better how the financial world works and how to make informed investment decisions. Moreover, it can also monitor your progress and offer personalized recommendations for additional resources or alternative explanations for difficult topics.

How can AI make the lives of adults easier?

With a plethora of investment opportunities and financial products available, making informed investment decisions can be challenging, but not with AI. It is no longer just a buzzword, but a trusted ally for individuals seeking to manage their finances more efficiently. The advanced algorithms and machine learning capabilities can aid in analyzing vast amounts of financial data and providing personalized insights into spending habits, investment opportunities, and more. For years, AI-programmed chatbots have been limited to prompt-based answers, but with new LLM (large language model such as OpenAI’s ChatGPT) these chatbots can analyze financial queries and respond accordingly. These can also help customers understand complex financial concepts and jargon, making it easier to comprehend the world of finance and empowering them to make informed financial decisions. Moreover, it can offer customized financial planning advice based on unique financial goals and risk tolerance, making financial planning more accessible and personalized. 

How financial advisors can benefit from AI?

Financial advisors are the most trusted individuals when it comes to finance as they provide financial education and guidance to achieve financial goals. AI is not meant to replace financial advisors but rather work in tandem with them to streamline their tasks and provide valuable insights. By automating routine tasks like data entry, portfolio monitoring, and reporting, financial advisors can save time and focus on more complex financial planning. For instance, AI can analyze vast amounts of financial data to provide insights and recommendations to financial advisors, improving the quality of their advice. Furthermore, it can help financial advisors stay up-to-date with changing financial regulations and compliance requirements, ensuring that they provide accurate and compliant advice to their clients. 

The potential of AI is limitless. The future of financial literacy looks bright with AI providing accessible and personalized financial education to individuals of all backgrounds and ages. Together, let us embrace the potential of AI to improve our financial literacy, empowering us to make informed decisions and secure our financial future. By unlocking the power of AI, we can take control of our financial wellbeing and turn