Developing Financial Wellness Tools with Artificial Intelligence

In a day and age where you can get a coach for anything — fitness, writing, meditation, even life — it makes sense that you can get a financial coach as well. However, these coaches aren't necessarily human coaches, they're digital. After all, it's impractical to have someone follow you around all day, telling you whether you could or should buy something, where you should save money, and giving you a picture of your financial health. Similarly, you can't always wait for a weekly or monthly coaching session to see if you should buy a latte or a new pair of shoes. Thanks to today's artificial intelligence capabilities and machine learning, many financial institutions are able to give a picture of a consumer's financial health, but they can't offer personalized advice or guidance on how those same users can improve their financial behavior. But this is where most of the engagement and personalization consumers want can actually take place. By providing this kind of advice, banks can prove themselves to be more valuable to users, help them find personalized solutions to their finances, and become a more integral part of their customers' lives. The future of financial wellness, as powered by AI and machine learning, is here. Many fintech apps and financial portals, using Envestnet® | Yodlee®'s data aggregation and analysis, can continuously analyze data and deliver personalized insights that can help consumers better understand and improve their financial health. To teach financial institutions and technology startups how to use artificial intelligence to further develop their financial tools, we hosted a webinar — Developing Financial Wellness Tools with Artificial Intelligence — featuring Katy Gibson, VP of Application Products, Envestnet | Yodlee; Keith Armstrong, Founder and COO,; and, Tiffani Montez, Retail Banking Sr Analyst, Aite Group with Evan Schuman of VentureBeat serving as the host and moderator. To get things started, Tiffani Montez discussed consumer attitudes toward personal financial management and financial wellness coaches. She presented a report Aite group had done in March 2018, Rebuilding Personal Financial Management in 2018: What Banks Need to Know. They assessed people's attitudes toward virtual financial wellness coaching. They also took note of banks' practice over the last five years to integrate personal financial management capabilities, such as budget, spending analysis and savings goals into their digital experiences. The growth of AI means that these institutions have the opportunity to reinvent their financial management tools and be able to create an interactive experience to help consumers take control of their financial health. To understand the opportunity, Aite wanted to understand how consumers tracked their finances today. What they found is that the majority of respondents used online and mobile banking to manage their finances — 71% of 22–34 year olds; 62% of 35–49 years old, and 56% of those 50 and older. It's also important, said Tiffani, for banks to understand their consumers' attitudes toward financial matters, and where they could use the most help managing their finances. They asked consumers what, at a high level, were their attitudes toward a variety of topics. They found that:

  • 59% of respondents can comfortably pay their standard monthly household bills, even when there are a few extra bills that month.
  • Four in 10 have saved some money over the year, whether it's in a separate account or earmarked in their regular checking account.
  • Four in 10 get nervous when they get large bills.
  • Three in 10 worry about whether they can pay their bills, and they get anxious when they think about their financial situation.

Aite then looked at what it would take to help customers manage their finances in a digital environment. Today, one of the limitations of personal financial management requires that customers maintain their budgets and their savings goals, which takes effort on their part to figure out how to improve their overall financial health. They found that 79% of 22 – 34 year olds, 77% of 35 – 49 year olds, and 62% of 50+ year olds were moderately-to-extremely interested in using a digital financial wellness coach. After Tiffani's review of the Aite Group findings, Evan opened the discussion up to the entire panel, asking questions like, "How do we make it easier to act on this advice that would make people more interested in pursuing digital financial management?" and "Do you think the advantages from banks or fintech have not been communicated effectively enough?" Tiffani, Keith, and Katy all shared their answers and expert opinions on the different questions Evan posed, discussing what other financial institutions and fintech companies have been doing to get more people interested in using digital financial tools. And you can hear those answers by watching the on-demand webinar yourself. To watch Developing Financial Wellness Tools with Artificial Intelligence, and to learn more about what AI and machine learning is doing in the digital financial space, you can register on our website and watch it at your convenience.