How to Use AI for Your Finances the Right Way

Generative AI (GenAI) is a system that uses large language models (LLMs) to analyze data and creates content after learning patterns from that data. GenAI chatbots are the conversational tools that we colloquially call “AI” – think ChatGPT, Claude, Copilot, Gemini, etc.

AI is an incredibly useful tool, and in the last several years it’s been used to brainstorm ideas, find information, analyze data, and generally make work and life a little easier. People have found very creative ways to use generative AI, but not all of them are entirely good.

The Upsides

82% of Gen Z and Millennials have turned to GenAI chatbots for financial advice, and sometimes it’s for good reason.

• Fast, clear, and easy to use. These tools are available everywhere – all you need is an internet connection and powerful machine learning is at your fingertips, often for free. Because they’re so conversational, they can make information easy to understand.
• Access to information. AI chatbots can read data that could take a human hundreds, if not thousands, of hours to review and understand. You don’t need to have gone through specialized schooling or know an expert to find information – these tools can do the research for you.
• Advice without embarrassment. Many people feel shame for lack of knowledge, mistakes they’ve made, or numerous other reasons. A computer program doesn’t judge, and users can ask GenAI chatbots the questions they’re too ashamed to ask a person they know in the real world.

…And The Downsides

That’s not to say that using these AI chatbots is always a good idea. At best, the advice you get is going to be very surface-level, basic information that isn’t tailored to your specific needs and goals. At worst…

• Sharing private information is a risk. You should never enter private information into public AI tools online. Sharing your personal information, such as your medical history, banking information, government identification, and more can be used in lots of dangerous ways. Not only are you giving away valuable data that LLMs are trained on, the companies operating these programs can potentially sell that data to whomever is willing to pay. Even worse, your data could be lost in a data breach.
• You get generic recommendations. Ever heard the phrase “garbage in, garbage out”? This is very true for the data sets that generative AI tools use. The big-name chatbots aren’t built specifically for financial purposes and can pull information from sources that haven’t been vetted. If you don’t know where a chatbot is getting it’s information from, then you don’t know if what it’s telling you is true or not. You could end up making a big financial mistake based on bad advice.
• Computers don’t understand the human psyche. One massive factor in personal finances is human behavior, and computers completely miss the nuances of human psychology that influence our decision making.

 

The Good News

AI absolutely has its uses, and there are some great tools out there that can give you additional insights into your spending habits and ways to reach your goals faster. But generic public AI chatbots probably aren’t a good source for financial information.

Many financial institutions are taking advantage of this burgeoning technology and incorporating them into their offerings, leveraging the quality financial data they already use and providing better, more efficient service to their customers and members. If they partner with a financial technology company for these services, they’re able to first vet the company and their security practices.

Overall, make sure to know where your information is coming from, especially when you’re dealing with something as important as your financial future. It’s a much safer bet to turn to your trusted financial institution for judgement-free resources to reach your goals instead of putting potentially sensitive information into public AI tools.