More than 70% of executives bet on artificial intelligence to manage their finances
2020 has changed our relationship with money. People already trust AI more than themselves in managing their finances, according to new research from Oracle and personal finance expert Farnoosh Torabi. The report, made from responses from more than 9,000 consumers and managers in different countries, reveals that the COVID-19 pandemic has increased financial anxiety, sadness and fear among the world’s population; Plus, it causes us to rethink who and what we trust to manage our money, and it redraws the role and approaches of corporate finance teams and personal financial advisors, according to this study.
COVID-19 has generated financial anxiety, sadness and fear
The global pandemic has had a negative impact on people’s relationship with money, both at home and at work:
Among managers, financial anxiety and stress increased by 186% and sadness by 116%; consumer anxiety and financial stress doubled, and sadness increased by 70%. 9 in 10 managers are concerned about the impact of COVID-19 on their organization, with the most common concerns being the slow economic recovery or recession (51%), budget cuts (38%) and bankruptcy ( 27%). 87% of consumers experience financial fears, encompassing issues such as job loss (39%), loss of savings (38%), and inability to repay debts (26%). These worries don’t let us sleep: 41% of consumers admitted to having lost sleep because of their personal finances.
People trust technology more than humans when managing their finances
The financial uncertainty generated by COVID-19 has changed who and what we trust to manage our finances. Consumers and managers are relying more and more on technology, even more than others, for help to better navigate today’s financial complexity:
67% of consumers and managers trust artificial intelligence more than a human being to manage their finances. 73% of managers trust AI more than themselves to manage their money; 77% love chatbots or digital assistants more than their own finance teams. Almost 9 in 10 managers (89%) believe that AI can improve its work by detecting fraud (34%), generating invoices (25%) and performing a cost / benefit analysis (23%). 53% of consumers trust technology more than themselves to manage their finances; 63% trust AI more than any other personal financial advisor. 66% of consumers believe that technology can help: detect possible fraud (33%), reduce their expenses (22%) and make investments in the stock market (15%).
The role of teams and financial advisors will no longer be the same
To adapt to the growing influence of technology, corporate finance professionals and personal financial advisors must embrace change and develop new skills:
56% of executives believe that technology will replace corporate finance professionals in the next five years. 85% of executives would like chatbots or digital assistants to help with financial tasks, including approvals (43%), budgeting and forecasting (39%), reporting (38%), and compliance and risk management (38%). Executives want corporate finance professionals to focus on communicating with clients (40%), negotiating discounts (37%), and approving transactions (31%). 42% of consumers believe AI will replace personal financial advisers within the next five years. 76% of consumers want technology to help them manage their finances, free up their time (33%), reduce unnecessary expenses (31%), and ensure payments on time (31%). Consumers also want personal financial advisors to provide advice on relevant purchasing decisions, such as buying a home (45%), a car (41%), or planning for retirement (38 %).
“Financial processes in our personal and professional world have become increasingly digital for many years and the events of 2020 have accelerated this trend,” said Juergen Lindner, senior vice president of global marketing for Oracle. “Digital is the new normal, and technologies like artificial intelligence and chatbots play a vital role in managing finances. Our research indicates that consumers trust these technologies to ensure their financial well-being beyond personal financial advisers, and managers see this trend reshaping the role of corporate finance professionals. Organizations that do not embrace these changes run the risk of falling behind their peers and competitors and suffering the productivity, morale and well-being of their employees, ”he explained.
Our relationship with money has changed: it’s time to embrace AI to manage finances
The 2020 health crisis has transformed the way consumers think about money and finance, and has increased the need for organizations to rethink how they use AI and other new technologies to manage financial processes:
60% of consumers say the pandemic has changed the way they buy goods and services. 72% of consumers say what happened in 2020 changed their feeling about cash management, with people being anxious (26%), fearful (23%) and “dirty” (19%). More than a quarter (29%) of consumers now say that the “cash only” option is a factor in their purchasing decisions. Businesses reacted quickly. 69% of executives have invested in digital payment platforms or methods and 64% have created new forms of customer engagement or changed their business models in response to COVID-19. 51% of companies already use AI to manage their financial processes, compared to 27% of consumers. 87% of executives believe that organizations that do not rethink their financial processes will face risks such as falling behind the competition (44%), having more stressed workers (36%), reports inaccurate (36%) or reduced employee productivity (35%).
“Managing finances is difficult at the best of times, and the financial uncertainty of the global pandemic has exacerbated economic challenges at home and at work,” said Farnoosh Torabi, personal finance expert and creator of the So Money podcast . “Artificial intelligence is great for helping in this regard, it handles numbers very well and has no emotional connection with money. This doesn’t mean that finance professionals will disappear or be replaced entirely, but this study suggests that they should focus on developing additional soft skills as their role evolves. “