Recent advancements in artificial intelligence have made it easier for consumers to let AI play a role in their finances. In a previous blog, I covered the use of AI in the banking sector. Today, let’s focus on the use of AI in your overall financial life.
Photo by Markus Winkler: https://www.pexels.com/photo/ai-news-concept-with-scrabble-letters-30869149/
How is AI used in Finance
Wealth Enhancement recently wrote a blog about AI and Finances. Artificial intelligence refers to machines that can think and make decisions independently. In personal finance, AI can help analyze information, like how much money you’re making and how you’re spending it, and help you make smarter decisions.
AI in financial services is everywhere:
- AI budgeting tools that monitor and categorize your spending
- Robo-advisors that can help with investment decisions
- Chatbots that give quick advice on money matters
- Fake money detectors that can prevent theft, scams, or other fraud
Some AI tools can help you track your spending and stay on budget in a fun, easy way, while robo-advisors may look at your risk and goals to help grow your money with simple, clear advice.
AI in finance is quickly becoming personal, practical, and powerful. In fact, research from credit giant Experian shows that nearly half the people surveyed (47%) have or are considering using generative AI-powered tools to help with managing their finances.
The younger generations are also embracing technology, with 67% of Gen Zers and 62% of Millennials stating they use technology to manage their finances.
Risks of Letting AI Handle Your Finances
Moneywise wrote an article addressing AI and the risks involved with sharing your financial information. In the past, scammers used data brokers, social media, the dark web, and other tactics to target victims or steal their identities.
But handing financial information to AI can make that process faster, easier, and less expensive. As AI gives fraudsters more sophisticated tools, consumers need to be even more careful about protecting their credentials or information. Caution: AI is trained using data, and when this information has bias in it, so can the results. It implies that certain tools may yield inaccurate or unjust suggestions based on faulty data.
“Consumers don’t need to fear AI tools,” Jennifer White, managing director of banking and payments intelligence at JD Power, told U.S. News & World Report. “But they do need to be more intentional about what information they share with them.”
“The risk to consumers is not necessarily the technology itself,” said White. “It’s how easily consumers can be manipulated into sharing information or taking actions that override existing safeguards.”
An example of this is what’s called an “indirect prompt injection”. This is a trick in which scammers hide malicious instructions in websites or other data sources that AI systems can access. “What it means is an [AI] agent goes to a site, reads text or goes into a login, whatever code it’s reading, and within that there’s malicious code that basically tells the agent to override the instructions it’s been given and use those instructions instead.”
Those instructions could trigger dangerous actions, such as sending emails containing personal information, including bank account details, tax returns stored on your computer, or your Social Security number. Yikes, I say, Yikes!
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How to Protect Yourself
AI has also been known to “amplify social engineering schemes,” which use psychological manipulation to persuade people to send money or divulge sensitive financial information. It’s important to protect yourself when using AI tools.
- Avoid including account details, login information, or anything that could be used to verify your identity.
- Be cautious about any unsolicited outreach that creates urgency or requests sensitive information.
- Use the fraud prevention tools offered by your financial institution: Banks and credit card companies often include security features on their websites and mobile apps. White encourages consumers to take advantage of those tools and follow the guidance of their financial institutions.
- Enable multifactor authentication and Face ID or biometric login.
- Avoid storing your chat history.
- Turn off the sharing of your data for training purposes or use an enterprise-class version where this is standard, vs. the free versions.
- Treat all AI interactions as “public-facing” logs and act accordingly.
Here’s a non-inclusive list of financial details experts say you should never plug into an AI model:
- Bank account info (including account numbers)
- Paychecks, W2s, and/or exact wage information
- Credit Card Statements
- Investment account info
- Social Security numbers
- Email addresses
- Passwords and logins to financial accounts
- Transaction details
- Account balances
- Sensitive tax info and tax documents
The More you Know …
AI is powerful and can be a terrific tool for organizing, planning, and managing your finances. Check the latest privacy and data retention policies of whatever AI tool you use.
Pay attention to what you’re loading into AI models. A little defensive planning can protect you and allow you to take advantage of this powerful tool!
I know it’s difficult to carve out time for this “administrative side” of life. That’s why I’m planning to provide a space where we may work on these types of activities together starting this fall.
If there are details you have questions about, send me an Email. If you’d like to learn more about my work, check out my website @ The Living Planner. I know I cover numerous topics every Sunday. I hope you find this helpful. Let me know either way, it’s always good hearing from you.
I’ve written my book for people who would like to consider planning for now and after a loss. The 2026 edition of Living Planner What to Prepare Now While You Are Living © can be purchased HERE.
Quote of the week: “When we seek to discover the best in others, we somehow bring out the best in ourselves.” William Arthur Ward
To finding the best in each other, Lynn
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