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Artificial Intelligence: Will AI Take Over Your Personal Finances?

The article was written by Jordan Klotnick, a Financial Analyst at I Know First. He graduated from Monash University with a Bachelor’s in Business – Majoring in Marketing.

Artificial Intelligence

Summary 

  • AI and Its Effect On The World
  • I Know First AI System
  • Will AI Control Your Personal Finances?

AI and Its Effect On The World
Artificial intelligence has quickly become a pivotal part in managing wealth. Everything we do these days cannot be done without the use of some sort of computerized system. However, it’s taken longer to figure out a way to use this in consumer day-to-day spending and saving habits.

Machine learning in AI has already become a norm in technology. Although there are dangers that have come out of it, such as compromising cyber security, there have also been some amazing steps into the future. Currently, there is research showing that AI can now predict social unrest up to 5 days before it even happens. AI can help detect terrorism and can also bolster cyber security.

The Central Intelligence Agency (CIA) has improved their ability, through AI, to detect potential dangers before they happen. In essence, AI is helping to keep our world safe as well as help make it a safer place in general. Self-learning, predictive AI is now being used by retail companies to try and predict what their consumers may want to purchase. It’s also consolidating shopping in a way that consumers won’t have to surf different websites to buy a variety of products, which is mirroring what Amazon already does.

I Know First AI System
Our algorithmic system at I Know First has been utilizing self-learning, predictive AI in the financial markets since we were established in 2010. It was developed by Dr. Lipa Roitman, a scientist with over 35 years of experience in the field.  He leads our Research & Development team to further develop and enhance the algorithm. Dr. Lipa Roitman is an R&D Chemist with a long record in computer modeling of processes, product development and process development. The concept of the current algorithm has crystallized following years of prior research into the nature of chaotic systems.

The system is a predictive stock forecast algorithm based on Artificial Intelligence and Machine Learning with elements of Artificial Neural Networks and Genetic Algorithms incorporated in it.

The I Know First Market Prediction System models and predicts the flow of money between the markets. It separates the predictable information from any “random noise”. It then creates a model that projects the future trajectory of the given market in the multidimensional space of other markets.

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The system outputs the predicted trend as a number, positive or negative, along with the wave chart that predicts how the waves will overlap the trend. This helps the trader decide which direction to trade, at what point to enter the trade, and when to exit. To read more about our algorithm, click here.  (provide the link)

Will AI Control Your Personal Finances?
Artificial Intelligence (AI) is way more than just using a computer. AI refers to computer science that allows machines to copy human behavior and intelligence. Over the past year there’s been a huge amount of artificially intelligent personal finance chatbots. There a numerous financial institutions that are starting their own apps, like Bank of America’s Erica, which aims to help customers make smarter financial decisions. MasterCard is bringing out Kai who will answer to verbal and texted questions about credit card transactions.

These apps predominantly use cloud-based artificial intelligence, predictive analytics and human-like messaging to follow consumer purchases. They can also automatically deposit small amounts of money into your savings accounts. Further, they can update in real time about spending habits.

Further, the apps can be a useful tool in terms of real-time financial tracking. However the product is still fresh, as such the quality and usefulness will vary.

“While these applications can provide personalized advice, they’re not always effective at helping a consumer actually change their habits and behavior,” Nicola Morini, managing director of artificial intelligence at professional services company Accenture.

Accenture is currently working on a digital personal accountant. The aim is for it to be more “human-centric” and have capabilities to automate other money-saving activities.

One of the biggest challenges facing this type of intelligence is consumer acceptance. Allowing an AI to control such a massive part of ones life, especially money is not an easy decision to make. There is much debate around how much further these personal finance chatbots have to go before they become useful money saving tools.

Another challenge is whether these chatbots can offer trusted unbiased financial advice. Certain banks apps may push you towards their own credit card rewards programs. Rather than a competing service that has a better deal. Thus, looking into using chatbots through non-banking start-ups may enable you to link their apps to bank accounts no matter which financial institution manages them.

In the future we may see these personal financial advisors become commonplace. But, for now, there’s no harm in giving them a go to try and save you some extra money. Eventually, it boils down to one approach that’s the best to save money: adopt a disciplined approach to managing income and expenses.

Conclusion 

The future of chatbots will be very interesting, with many large banks looking towards automated “human-like” chatbots. Consumers will be the deciding factor of whether they are useful, or useless. Only time will tell.