Generative AI Can Make Personal Finance More ... Personal

Consumers’ comfort with the technology suggests how financial advisors can raise their game

Young man using smartphone and laptop at home

People are turning to generative artificial intelligence (AI) for financial advice — and it’s not for the reasons you might think. Consumers are more likely to say that AI fulfills their needs of connection, self-expression, and learning in financial advisory scenarios than a human advisor. Such a preference is striking and carries significant implications for traditional financial advisors.

The findings, which come from a recent Oliver Wyman Forum global survey, suggest consumers desire to feel comfortable, engaged, and learn on their own terms when thinking about what to do with their money — like they’re looking for more of a coaching and mentoring relationship than the traditional style of financial advice. Given the power consumers have with tools like OpenAI’s ChatGPT in their pocket, financial institutions will need to adapt their services — and consider incorporating a role for AI — to meet these desires or else risk losing or missing out on clients. 

Most consumers are interested in using generative AI for financial advice

The survey, involving over 25,000 consumers across 16 countries, reveals that 86% of consumers are interested in using generative AI for financial planning and advising, and 42% are already doing so. Among Gen Zers, interest spikes to 92%, indicating that this is likely to be a growth market.

Consumers also are interested in using generative AI for navigating significant financial decisions, an area that has traditionally been the bread and butter of human advisors. Forty-one percent would use generative AI for major decisions like navigating how to pay for college, save for retirement, or buy a home. This type of engagement is now seeing potential AI takeover, not just as a supplement to human advice but as an alternative.

Consider the psychological motivations

Many factors could be contributing to consumers’ interest in using AI for financial advice, including its accessibility and perceived sense of objectivity. However, our survey points to psychological motivations, an unexpected finding that financial institutions cannot afford to ignore.

Connection: Consumers who use AI are roughly 25% more likely to say it makes them feel supported and understood than a human advisor. Generative AI’s perceived lack of emotions and preconceptions about the user, even as it offers a dialogue that mimics human conversation, may give a sense of psychological safety that makes it easier to share personal information without fear of embarrassment or shame.

Self-expression: Respondents are nearly four times more likely to say AI helps them align their personal values with their financial plan than a human advisor. The tool’s ability to quickly analyze a prompt, provide ideas and project scenarios, enables users to experiment freely with different financial outcomes, which can foster a sense of creativity and autonomy in making financial decisions.

Learning: Consumers are over four times more likely to say AI helps them find deeper meaning in managing their finances compared with a human, and almost 50% more likely to say AI helps them learn about financial strategies and planning. That suggests generative AI’s ability to summarize complex information and offer personalized insights puts users at ease by providing them with context and clear explanations of the advice they receive.

The data paint a picture of what consumers seek and do not find in traditional financial advice — a supportive environment that fosters self-expression and learning. The finding suggests an opportunity for financial institutions to adapt their advisory services with generative AI to provide a richer and more fulfilling experience.

How to adapt the advisory model 

Institutions have offered algorithm-driven advice with minimal human intervention for years through tools like so-called robo-advisors or self-service calculators. However, our research makes clear that consumers desire an experience that goes beyond what these tools offer.

Financial institutions can build digital solutions — either as a complement to human advisors or as an alternative — that creates this experience. A conversational generative AI interface, perhaps using virtual avatars, could provide engaging and personalized advice without the fear of judgment that can come in human interactions. Such an arrangement can encourage clients to go at their own pace and freely express their goals, values, and fears in managing their finances, which can help them feel better supported and more satisfied with the choices they ultimately make.

Generative AI's abilities to project scenarios from qualitative inputs and summarize unstructured data can be large assets in this kind of arrangement. In addition to typical inputs like income or savings, for example, the tool could prompt clients about their values and desires. If a user responds by describing a passion for sustainability and a dream of traveling to the Costa Rican rainforest, the AI tool might suggest a range of investment options — including socially responsible ones — with different risk-reward trade-offs designed to fulfill those desires.

The user can also access a vast amount of complex financial knowledge in a summarized format that works best for their learning; for example, by directly asking questions or asking the tool to produce custom lessons or to suggest social options on how to speak to friends and families about finance.

Institutions will have to find the right guardrails for the technology’s risks, which may include safeguarding sensitive client data, ensuring algorithmic fairness to prevent bias, and compliance with evolving financial and AI regulations. Transparency in algorithmic decision-making and continual monitoring of model performance are critical steps to create client-trust and resilience.

Understanding why consumers turn to generative AI for financial advice also can help firms improve their human advisory service. Financial institutions can prioritize financial literacy and decision-making autonomy in advisory sessions, foster an open dialogue where the client is encouraged to ask questions and explore options with the advisor rather than reviewing preset strategies. This could include regular check-ins, rather than more formal sit downs, akin to interactions consumers have with public AI tools, creating a more approachable and mentorship-focused advisory atmosphere.

These strategies are a starting point for financial institutions to create more engaging and meaningful experiences for their clients. Ultimately, it is imperative that institutions rethink financial advice to meet the needs of their clients and stay relevant in this new age where financial advice is just a prompt away.