Will Using AI for PFM Help Consumers Develop Better Financial Habits?

EXCLUSIVE — Will the use of artificial intelligence push banking customers to better personal finance and saving habits?

Fintechs have been exploring this idea for quite some time now, whether it be through fraud management, or using AI to execute trades across global equities algorithms business. Banks are just starting to look into how AI can be used for consumer finance beyond customer support. But now, the Royal Bank of Canada is implementing AI technology, powered by Personetics, into its mobile app for PFM.

“If you’re a customer that has a mobile account, it will intelligently look at the cash flow, and automatically start to save money,” Peter Tilton, senior vice president of digital for RBC, told Bank Innovation about the integration, which will go live on RBC’s next mobile update which occur within the next few weeks.

The capability, announced last week, will tackle consumer savings and money management, respectively, referred to by RBC as NOMI Find & Save and NOMI Insights.  About 1 in 9 Canadian smartphone users will see the effects of NOMI, as about 80% of RBC customers will gain access to the tool after the first update, according to Tilton.

RBC has seen about a 40% jump in financial transactions on mobile over the past year. This comes after the bank has rolled out over 20 new capabilities in its app to over 3 million mobile customers, according to the bank.

One facet of NOMI is devoted to automating savings, an especially beneficial tool for those consumers with less spare cash.

“It will maximize the customer’s savings benefits, and it’s completely personalized. We think it’s a good use of AI that will help a lot of people, especially those Canadians that live paycheck-to-paycheck,” Tilton said.

The bank’s AI-powered money management feature will also benefit this group of consumers, as it will help categorize spend and help to spread financial literacy, Tilton said.

As more banks and fintechs turn to AI to provide deeper data analytics and financial insight to their consumers,  many are running up against the same challenge: using artificial intelligence to inform a customer how to change their behavior doesn’t guarantee they actually will.

However, bringing these more personalized bits of financial data to the customer is a good step forward towards facilitating that change.

“What NOMI’s doing, is it’s helping customers see where their money is going, it’s helping them to put away money, which is the most logical way to build up wealth,” Tilton said.