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What's even more promising is that nearly half are actively using or are considering using these tools to manage their personal finances — a sentiment that rings especially true for America's youngest consumers, with 67% of Gen Zers and 62% of millennials stating they use the technology to manage their personal finances.
This marks a significant shift in how people engage with financial education and highlights the growing role technology plays in improving financial literacy. Consumers who are using generative AI for personal financial management overwhelmingly report positive experiences with the technology and 67% said it helps them feel more productive or make decisions faster. Those who are using generative AI for personal finance needs are using it for saving and budgeting (68%), investment planning (48%) and credit score improvement (48%).
So where does this leave us? Can generative AI be the silver bullet needed to improve financial literacy? The short answer is: No, generative AI is not a "silver bullet" that will solve all financial literacy challenges. However, it can be a powerful tool to support consumers who are looking to build a foundation of financial knowledge.
Generative AI can assist with tasks such as answering basic finance questions, helping users understand key concepts like credit scores or interest rates, and even offering personalized suggestions for creating a budget. For many consumers, these resources are an accessible and free alternative to hiring financial advisors or attending expensive financial education seminars.
But like any tool, generative AI has its limitations. While it can provide general guidance, it's not a substitute for professional financial advice. Additionally, because generative AI is only as good as the data it's trained on, and there is no shortage of misinformation about credit scores and personal finance online, there is a risk of inaccurate information. It's crucial that consumers verify any financial information they receive through AI tools, cross-checking it with trusted, authoritative sources.
Sen. Edward Markey warns that biased AI algorithms are making decisions that deny mortgages to Black people.
This appetite for financial knowledge and uptick in use of generative AI tools presents a new wave of opportunity for the industry to build trust and engage with consumers. With the understanding that consumers are now tapping into new technologies to learn about credit and personal finance, our industry must play a role in helping consumers understand the ways to use these tools effectively and safely.
For example, consumers may be tempted to input personal information to get tailored recommendations from generative AI, but it's important that consumers avoid sharing sensitive personal information. Likewise, given the opportunities for generative AI hallucinations or bias, it's important that consumers know where to go to verify the information they may gather from these tools. This means cross-referencing AI-generated advice with trusted websites, financial institutions or speaking with a professional advisor if needed.
Generative AI complements, rather than replaces, the human connection that's often necessary when navigating the complexities of personal finance.
Many consumers still need the empathy and personalized guidance that a financial advisor or credit counselor can provide, especially during critical life moments such as buying a home, managing debt or saving for retirement. However, for those who are looking for a basic understanding of financial concepts or need a starting point, generative AI can be an invaluable resource.
Ultimately, what's exciting about the rise of generative AI in financial literacy is its potential to democratize access to knowledge. In an era when traditional financial education can be inaccessible for many consumers, generative AI offers a free, on-demand alternative for consumers to begin their financial education journey.
It's an opportunity for people to get started — learning basic principles, asking questions and taking steps toward improving their financial health.
Again, generative AI is not a silver bullet, but it is a powerful tool in the financial literacy toolkit. With the right guidance, consumers can leverage these tools to better understand their finances, make smarter decisions and ultimately build a stronger financial foundation. But like any tool, it should be used thoughtfully and responsibly, with a focus on verifying information and protecting privacy.
In the end, the true key to improving financial literacy lies in providing accessible resources, empowering consumers, and ensuring that they are equipped with the knowledge and tools they need to protect and grow their financial health.
