For millions of people, asking for financial advice is like throwing money at a pricey financial adviser – a privilege few can afford.
Why chatbots are giving humans a run for their money
The gap between AI and a human adviser is narrowest for commonsense guidance – and that’s exactly where most of us need help with basic questions. Chatbots are capable of providing accurate answers to these queries without breaking the bank.
These digital assistants use sophisticated natural language processing (NLP) and machine learning algorithms to understand and respond to user queries. By leveraging these technologies, developers can create chatbots that are remarkably good at providing straightforward advice on topics like budgeting, saving, and investment.
Take Digit, a popular chatbot developed by N26, a Berlin-based digital bank. Digit uses AI to analyze users’ income and expenses, providing personalized budgeting advice and automatic savings suggestions.
When to trust a chatbot’s guidance
While chatbots are great for basic guidance, there are limits to their expertise. Complex financial decisions, such as estate planning or tax optimization, require human judgment and expertise.
According to experts, chatbots are best suited for providing quick answers to everyday questions, such as:
- How much should I save each month?
- What’s a reasonable interest rate for a loan?
- Can I afford to take on debt?
For many people, these types of questions are the bread and butter of financial advice. And with chatbots, you can get these answers for free.
What this means
For the average person, getting financial advice doesn’t have to mean breaking the bank. Chatbots have narrowed the gap between AI and human advisers, providing accessible and accurate guidance on basic financial matters.
Whether you’re looking to save for a emergency fund or plan for retirement, chatbots are worth exploring as a free or low-cost alternative to pricey financial advisers.
