Why AI matters to your money

You’ve probably noticed a lot more videos on the FYP about how ChatGPT can make you rich. Or how it’s going to take all our jobs in the next 18 months. 

We're just going to leave that alone and talk about something that's actually real: the impact AI is having on personal finacne.

This next wave of AI assistants are already here and making things more inclusive, more helpful, and more likely to help you save.

It's got us really excited, which is good because we're an AI company that's been doing this for 6 years.

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How does AI make finance more inclusive?

There’s a few big areas where machine learning is leveling the playing field. Take lending decisions and credit scoring, for example. 

Previously, whenever you needed to apply for a loan, credit card, or rent an apartment, you had to pass a credit check. 

This means a company pulls up your credit score, which is based on a mix of things like, how long your oldest credit account is, the "variety" of the credit you have and other things that not only numb the mind, but also sets up a Catch-22.

To get access to credit, you need a credit history. But to build your credit history, you need access to credit.

‍And if you've got a bad credit score (or not enough credit history) you're going to pay $1000s more in interest.

So how is AI fixing this?

‍Businesses can now use machine learning to look more at your payment history vs. the usual credit scorecard. This new system takes into consideration the payments you’re already making each month on things like rent and utilities.

Historically, people faithfully repaid their bills but they didn’t have a high credit score because they didn’t have a fancy house (i.e. mortgage) to pay down. Hopefully that’s coming to a close.

Companies that choose this approach are able to offer a broader range of credit products to young people, immigrants, or anyone else just starting out on their financial journey. 

‍So just like that, AI is helping more people get approved for things like car loans or getting a much lower interest rate than they might see otherwise.

Thanks robots. 

The next area, which is where Cleo really shines, is in the area of financial advice.

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Everyone needs an AI money coach for free

Financial advice used to be hard to come by. Since we’re not taught anything related to it in school, most of us already start at a disadvantage. At the very least before graduation they could say “Hey Class of 2023, the free pizza for the credit card thing. Shitty idea. Don’t.”

So you can see where having a big robot brain can help you close the knowledge gap. They can provide a level of financial literacy that can set everyone up for long-term (and short-term!) success.

If you knew that saving $200 a month into a retirement account would be worth over a $1M at the end of your career, that'd be a game changer right?

Which brings us to accessibility.

Financial advisors, counselors, accountants...most of them don’t work for free.  Which isn't helpful when you're just starting out or struggling to pay the bills. So access to qualified professional is often restricted to the people who can pay to play.

Thankfully things are changing. There's non-profits like the Foundation for Financial Planning. We’ve got loads of podcasts, bloggers, and god help us, FinTok, teaching us about money.

Even so, having the time to learn about it is a privilege and it can still seem super complicated. Enter the apps.

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How apps like Cleo are changing the game

Now the nerds among us will be quick to point out that apps like Betterment and Wealthfront have been using AI to help manage investments for everyday people for years. You’re correct. Robo-advisers are a real thing.

But let’s go one deeper.

AI financial assistants, like Cleo, can actually analyze your spending and then make helpful suggestions where you should cut back. Or you could ask her “can I afford a loot crate” and she’ll tell you straight up if it’s on budget or not. 

We’re talking about some deeply personal and instant advice. 

AI assistants are also able to hit you with proactive notifications when you’ve got a low balance or you’re likely to overspend. Just that little message would save the average person $250 dollars a year in overdraft fees.

They can help you keep track of bills. Determine if a transaction looks suspicious. Coach you to a better credit score or a downpayment. And so much more.

Now, if your mind is blown then we have to apologize for what comes next.

It’s probably going to melt.

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Cleo x ChatGPT

So earlier this year, we did a thing. You could read more about it here, but basically we connected Cleo’s big AI brain to ChatGPT’s big AI brain and literally created a super personal finance AI. (The technical term is a “super agent” which sounds cool too.)

Even now, she’s still surprising us with all the cool stuff she can do.

Need a grocery list when you’ve only got $50? Bam.

Need her help writing a letter to your landlord to negotiate your bills? Bam.

Need a song written in the style of your favorite singer about your spending habits? It’s actually thing. And no I’m not sharing a screenshot.

This is literally the future.

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AI financial guides for the win

The bottom line is that you can use AI right now to help you make a change. Saving more. Spending better. You don’t even have to be good at math.

Now, we could just ramble on but I know you’re dying to ask Cleo to write you a song in the style of Taylor Swift. 

You can hit that yellow button up there to get started. It only takes a minute or two.

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