AI-based Personal Financial Management: Opportunities and Challenges

Abstract

AI powered tools are revolutionizing as they are hands free, automated, and data driven. AI allows individuals to track spending, investment management, and future goal achievement with little manual effort through numerous AI powered tools like machine learning algorithms, robo-advisors, and virtual assistants. AI enhances financial literacy, gives real time details, and sets personalised strategy targets to each and every individual through big data and predictive analytics. While AI-based Personal Financial Management offers various benefits, it facesome problems also. Majority of concerns focus on privacy as AI is data sensitive and personal. Access to finances without privilege can cause fraud, identity theft, and various other outcomes. AI algorithms are also perceived to be unbias but efficient. If unwilling trained data is used for algorithms, results can be unfair sponsorship. Additionally, less human supervision can be regarded to be more efficient, but putting too much trust in AI led financial tools can cause suboptimal decision making within intricate scenarios. Lack of regulatory framework concerning AI in personal finance is an ethical and legal issue too. This article analyzes the benefits and issues associated with AI-based personal financial management. It explains the ways in which AI assists users in their financial decisions through automation, analytics, and risk management. Finaly, enhancing AI-Finance security, making algorithms highly transparent, and developing effective regulations are some of the suggested measures for the enhancement of AI-based Personal Financial Management systems. AI is expected to update the way people manage with their finances, so its use in personal financial management will increase as the technology improves. It is very important to recognize the opportunities and challenges in order to encourage responsible use of AI technology in the finance.