The advent of AI in traditional financial methods has changed every aspect of money management. The availability of various investment alternatives in the Indian market can make investors confused while making investment decisions. AI uses its technology, machine learning, to read, analyze, and interpret past financial data and help investors make final decisions. The combination of finance and AI has transformed the sector. AI technologies are making money management simpler, smarter, and more effective. From sophisticated investment platforms to automated budgeting software, you can now manage your personal finances more easily with the help of AI.

Impact of AI in Personal Finance Management

Automated Budgeting and Expense Tracking

AI is revolutionizing personal finance in two key areas: expense tracking and budgeting. Artificial intelligence-driven programs can categorize expenses, assess users’ spending patterns, and provide financial insights. These applications have the ability to automatically monitor transactions from multiple accounts and provide financial insights for an individual.

Artificial intelligence provides personalized advice on budgeting and getting money using machine learning algorithms. This makes consumers highly knowledgeable about their spending and savings patterns.

Smart Investment Management

Artificial intelligence helps novice investors manage their investments through algorithmic trading, sentiment analysis, portfolio optimization, risk management, and personalized investment advice.

Algorithmic trading is a method in which investors use computer programs to automatically open and close trades with predefined rules. Algorithmic trading is the most direct and widely used technique in investment management. Investors, especially traders, use AI algorithms to evaluate large datasets that are traded at high speed.

Sentiment analysis refers to the identification of human psychology that results in market movements. It assesses whether sentiments are bullish (positive), bearish (negative), or neutral. Evaluating data helps in decoding sentiment and making better decisions.

Credit score improvement

മുൻകാല Credit score മോഡലുകൾ ക്രെഡിറ്റ് സ്കോറുകൾ കണക്കാക്കുന്നതിന് പ്രധാനമായും ക്രെഡിറ്റ് ചരിത്രത്തെ ആശ്രയിച്ചിരുന്നു, എന്നാൽ ചെറുപ്പക്കാർ, പരിമിതമായതോ ക്രെഡിറ്റ് ചരിത്രമില്ലാത്തതോ ആയ കുടിയേറ്റക്കാർ തുടങ്ങിയ വ്യക്തികളെ ക്രെഡിറ്റ് ചരിത്രം കണക്കാക്കുമ്പോൾ സാധാരണയായി ഒഴിവാക്കിയിരുന്നു. എന്നാൽ, AI ക്രെഡിറ്റ് സ്കോർ മോഡലുകൾ സോഷ്യൽ മീഡിയ പ്രവർത്തനം, UPI പേയ്‌മെന്റുകൾ, ഓൺലൈൻ വാടക പേയ്‌മെന്റുകൾ തുടങ്ങിയ സാധ്യമായ എല്ലാ സ്രോതസ്സുകളിൽ നിന്നുമുള്ള ഡാറ്റ സംയോജിപ്പിച്ച് വ്യക്തിഗത സാമ്പത്തിക പെരുമാറ്റത്തിന്റെ സമഗ്രമായ ഒരു ഡാറ്റ ഉണ്ടാക്കിയെടുക്കുന്നു. ഇത് അതത് വ്യക്തിയുടെ ക്രെഡിറ്റ് സ്കോറുകൾ ആക്‌സസ് ചെയ്യുന്നതിനും വർദ്ധിപ്പിക്കുന്നതിനും സഹായിക്കുന്നു. Plat.AI, Tribe.AI, ZBrain, Credit Karma, Experian Boost പോലുള്ള AI ഉപകരണങ്ങൾ റിയൽ-ടൈം ക്രെഡിറ്റ് സ്കോറുകൾ കണക്കാക്കാൻ സഹായിക്കുന്നു. .

Also, with the help of predictive analytics, AI predicts the financial behavior of an individual based on their historical data. AI identifies the likelihood of individuals defaulting on loans or making timely payments, which informs lenders about the individuals’ credit scores.

AI Assistance in Banking and Financial Services

AI has brought about several significant beneficial changes for both institutions and consumers in the banking and financial services industries;

Personalized Customer Service: -

AI improves customer services by applying advanced data analytics and machine learning algorithms. AI-driven chatbots and virtual assistants have revolutionized customer interactions with banks. These virtual assistants are available 24*7 and help with various tasks like financial transfers, checking account balances, etc. Offering fast and reliable assistance not only reduces waiting times but also increases customer satisfaction.

Easy and Fast Loan Approval Process

With the help of artificial intelligence, the loan approval process has been made simpler and faster. Traditional loan approvals are cumbersome and time-consuming. To assess creditworthiness more comprehensively and effectively, AI-powered systems can examine a range of data points, including income, spending trends, and credit history. In addition to reducing risk for lenders, this results in faster loan approvals and a more efficient customer experience.

Personalized Financial Advice

AI tools like Mint, Personal Capital, Moneyfit, WiserAdvisor, Tendy, and Finchat.io can examine spending trends, savings patterns, and long-term financial goals and provide recommendations for investments or budget improvements based on a customer’s financial goals. In this way, AI helps investors make more informed and better decisions, taking into account their individual needs and preferences.

AI is changing the financial landscape, from managing personal finances to providing more comprehensive banking and financial services. Even with minor hurdles, AI in finance has a big future. It could lead to a more effective, efficient, and inclusive financial system. Adopting AI in money management is not just about using technology, but also aims to improve the financial future of everyone.