Artificial Intelligence is the newest trend to hit the world of money. We are seeing the launch of a number of services based on 'chatbots', which are designed to respond to your needs, and prompt you to take sensible financial steps. The question is whether they will make any difference.
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Patrick Connolly, a certified Financial Planner for Chase De Vere, says: "We are seeing artificial intelligence progressing incredibly rapidly across different financial services, and over the next five to ten years we can expect to see dramatic changes. Chatbots are one early sign of the progress made so far."
One new chatbot is Plum, which is billing itself as the UK's only savings chatbot. It's an artificial intelligence programme that talks to you through Facebook's Messenger. Using a 'smart algorithm', it gets to understand your spending patterns, identify income and bills, and create a unique profile for you. It then calculates a small, safe amount of money to save, and automatically transfers it to your Plum account every few days.
Another new chatbot is from credit checking service ClearScore. The artificial intelligence programme - called Coaching - is said to be the first chatbot designed to improve your credit score.
There are three versions: 'build' (offering help with building a score from scratch), 'repair' (if you have a damaged score), and 'shape up' (for anyone with a healthy score who wants to improve their finances in general). Each chatbot service will suggest small, easy steps for people to take to boost their credit rating. It will produce a tailored 'to do' list, so they can spend five minutes at a time improving their score, and getting encouragement along the way.
These innovations follow the arrival of Myia last year, which regularly scours the market for the cheapest energy company - based on your use - and then lets you know if you can save by switching. If you tell it that you want to change - it will then complete the switch for you. If you switch to a fixed tariff for a specific period, it will carry out its next search as your tariff is coming to an end.
Does it work?
Some Plum users have gone public with their enthusiasm for the approach. David, 29 from Nottingham has saved over £300 in just two months. David comments, "It's just nice knowing that I'm saving, to be honest. I'm pretty shoddy with it normally. Plum just does it in the background, I don't really need to think about it."
If you have reasonably regular income and outgoings, it will learn your patterns very quickly. If you have less regular income, or occasional large expenses, it is designed to learn this too - and never to take so much that you risk running out of cash. However, if you are testing its limits, it's worth checking your account before making a big purchase, and possibly telling the chatbot to move some funds back into your current account.
Likewise, having regular nudges to take small steps to improve your credit score may be an effective way to keep people on track and make the process more manageable.
Connolly says: "If AI can help people do things like develop a savings habit, it's a useful development. It will be good to see that develop to make it easier for people to put money aside in long term investments and pensions too."
However, we're not yet at the stage where artificial intelligence can take over managing your money entirely. He says: "At the moment artificial intelligence can deal with relatively straightforward things, and straightforward cases. As we move forward, we can expect it to become more sophisticated."
Arguably, there are also things that only humans can do too. Connolly says: "When you are giving face to face advice, part of your job is to empathise with people, understand what they want, and to dig a little deeper to really understand their needs. At the moment, artificial intelligence is a long way from being able to do this."