How Artificial Intelligence Could Impact Your Finances

From better analysis to faster service, here's a look at how AI is shaping the future of the financial world.

digital representation of artificial intelligence

For years, artificial intelligence (AI) has been a buzzword in the business world—a buzzword that would come and go as the technology stalled and advanced, or as interest dried up or revived.

Today is different. According to Brian Pearce, head of Machine Learning in AI Enterprise Solutions at Wells Fargo Bank, we’re now entering what many specialists call the third wave of AI. This time, AI is here to stay.

“We have a perfect storm,” Pearce explains. “The combination of being in the age of large amounts of data—which is the raw material of AI—and today’s massive, more affordable computing power means AI can do some really transformative things.”

What does that mean for today’s financial services customers? Pearce and Secil T. Watson, Head of Digital Solutions for Business at Wells Fargo Bank, say AI will lead to more personalized and convenient service, more streamlined funding and credit sources, and a more intuitive banking experience in general.

Four advancements led by AI 
Today’s AI has four key strengths that are shaping the tools transforming banking.

  • Improved analytics. AI can gather, organize, and interpret huge amounts of data, making a leap forward in our ability to shape services in response to that data.
  • Machine learning. AI can go a step further with data analysis, allowing deep examinations of past actions (behavioral analytics) and creating the ability to look ahead, making predictions about the future (predictive analytics). Among other things, this could change how you and your investment professionals manage your portfolio.
  • Automation. AI’s ability to interpret large amounts of data also gives it a role in the automation of repetitive tasks and simple decisions. This reduces the amount of time that people—advisors and customers alike—need to spend on those tasks, opening up more time to focus on more complicated tasks and decisions.
  • Natural language processing. AI can identify and understand our voices and typed text, allowing us to interact with technology systems in a much smoother and more secure way.

“AI will enable us to know all of our customers better,” Watson explains. “It will make us more efficient and smarter, allow us to work faster, and serve customers better.” Here’s how that may affect your daily financial life.

Improved digital and voice communications
Chatbots—programs designed to have online conversations with customers—are getting smarter and more useful. In fact, a chatbot is coming to the Wells Fargo mobile banking app. This will allow customers to ask questions and get fast responses about information such as account balances and spending habits (for example, “How much did I spend at Starbucks?”).

Over time, chatbots will become more advanced, with the ability to answer more complex questions. The goal? “To provide the information a customer is looking for on the very first interaction,” says Pearce. “The day is coming when there will be no more navigating through menus. You’ll say what you want to know—or do—and AI will help us give you exactly what you’re looking for.”

More insightful portfolio management
According to Watson, “AI can help make advisors much more valuable, especially for those who have grown up with the technology.”

For example, millennials may find Intuitive Investor appealing. This hybrid digital solution from Wells Fargo Advisors can broadly determine an investor’s risk tolerance and investment goals based on their answers to questions and combines technology with the option to access financial advisors from Wells Fargo Advisors. These services can help them manage such challenges as tax efficiency and rebalancing. Note: Investments are not insured by the FDIC or any other federal government agency, are not a deposit of or guaranteed by a bank or any bank affiliate, and may lose value.

Stronger passwords—and possibly a replacement
AI is getting better at understanding what we say, and who is saying it, shares Watson. “Voice-authentication technology is already in use in some situations—customers calling a Wells Fargo call center might encounter it, for example—because we find that it’s more secure than PINs and passwords and easier for the customer. We want to get rid of passwords in the future,” Watson says. “We’ll use biometric authentication to protect our customers and to help us serve them better.”

Faster analysis for in-the-moment insights
Watson imagines a day when a business customer looking for a loan can get an instant decision based on analytics. Today, AI is used to study activity to flag anomalies and alert customers to potential issues or opportunities.

For example, Desktop Deposit, a program within the Wells Fargo Commercial Electronic Office® (CEO®) Portal, lets corporate customers download copies of incoming checks for a small per-check fee. AI-based analytics showed inconsistent use of the tool; for example, some employees in the same office were downloading all checks, and others none. “We let them know what we saw,” Watson says. “Some of them were thrilled because they were able to tell their employees that these downloads were not necessary, which saved them money.”

More personalized service
AI is automating, and increasing the speed of, many repetitive tasks. While that may conjure images of job loss for many workers, that’s rarely the case. In fact, this is freeing up time for more personalized service and more creative problem-solving.

“AI gives us the time and the power to make decisions and solve problems rather than sifting through data,” Watson says.

“We’re only at the beginning of the AI journey,” Pearce adds. “In time, what people are going to see will amaze them.”

Mike Woelflein is a business and investment writer based in Yarmouth, Maine. Image by iStock

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Intuitive Investor® accounts are offered through Wells Fargo Clearing Services.

Wells Fargo & Company and its affiliates do not provide legal advice. Wells Fargo Advisors is not a tax or legal advisor. Please consult your legal and tax advisors to determine how this information may apply to your own situation. Whether any planned tax result is realized by you depends on the specific facts of your own situation at the time your taxes are prepared.

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