Could an AI chatbot fix your finances?

The government is reportedly planning to ask UK taxpayers to use artificial intelligence (AI) chatbots to pay up, but could the technology also help manage your personal finances? 

According to The Telegraph,  Rishi Sunak's tech experts are working on an "experimental service" called Gov.uk Chat that would help users pay their taxes and access pensions information. 

The chatbot uses the OpenAI technology behind ChatGPT, the paper said, and would be the "biggest use of advanced AI" so far by Whitehall. 

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Although AI technology that "controls our purse strings" is still new, said GoodHousekeeping, thousands of us are using its tools to "save, invest and budget". 

How AI is being used in financial services 

Most consumers don't have access to a personal financial adviser, said the Financial Times (FT), but a "growing number" of AI services are helping people "track their expenditure and give advice on how best to manage their money". 

These include apps such as Wally, which tracks users' finances to identify trends, predict upcoming expenses and create "chatbot-generated personalised spending plans".

Another option is Plum, added the newspaper, which has an algorithm that sets aside an "affordable amount" that users can save as soon as they are paid. 

Mortgage-holders can also sign up to Sprive, which uses your data, explained GoodHousekeeping, to "calculate when you can afford to make mortgage overpayments" and switch lenders if there is a better deal. 

Morgan Stanley is also working on an AI tool for its "wealthy clients", Reuters reported, that provides a virtual assistant for its bankers to "quickly find research or forms instead of sifting through hundreds of thousands of documents".  

Benefits and drawbacks of AI advice

AI has potential in financial services, explained the London Institute of Banking and Finance, due to its ability to process "large amounts of data" and perform tasks that would take an adviser or paraplanner "several hours to complete". 

The financial sector is often criticised for its "complex terminology", said Jonathan Merry, chief executive of Moneyzine, on Metro.co.uk, but tools such as ChatGPT can "summarise or define terms that can often be difficult to understand". 

Users must remember that AI chatbots are "experimental technology", the news website added, so "be careful about what information you provide". 

Some are concerned that the insights and data generated by AI could "nudge people" into spending more, said the FT, while financial firms relying on chatbots for their services could exclude people who aren't "digitally savvy".

There may be issues with receiving financial advice through a chatbot as well.  

There are "strict rules" when it comes to who can and can't give financial advice, said The Times. An adviser must be regulated to give "tailored recommendations", so an AI may "at best" just give guidance. 

The tool may be a "whizz at throwing up numbers at you", explained MoneyWeek, but it won't have a "deeper understanding of your needs" or the "human touch". 

Google and Open AI chatbots do "flag the importance of seeking financial advice", added MoneyWeek, and they make clear they are providing guidance, but some users are "unable to distinguish" the difference. 

An AI chatbot may not be "suitable" for regulated advice, said The Banker, as there is an "inherent risk" the model will generate answers that are inaccurate or even completely invented. 

However, the regulatory and enforcement position on AI is "rapidly evolving", added the financial publication, and there are hints that "further regulation may be on the horizon".