Artificial intelligence (AI) is rapidly reshaping the way we handle our finances. While many users are familiar with basic tools like automated bill pay, AI is now evolving beyond advisory roles to actively making decisions with your money. Major corporations such as Google, Walmart, and Mastercard are at the forefront, rolling out advanced AI-driven financial tools that can shop, pay bills, and even manage transactions on your behalf. While this advancement brings convenience, experts caution that it comes with significant risks. Here's a deep dive into what this means for consumers.

From tools to decision-makers: How AI is evolving

AI's role in finance isn't new. Automated systems like bill payment apps have been part of everyday life for years. However, the next generation of AI tools goes beyond simple automation. These systems, referred to as "agentic AI," don't just analyze your data — they act on your behalf. For instance, an AI could monitor your household essentials like toothpaste or contact lens solution and automatically reorder them when you're about to run out.

Josh Gellers, a faculty fellow in artificial intelligence at the University of North Florida, explains that agentic AI has the capacity to access and interact with various systems, from managing bank accounts to making decisions within apps. This means consumers need to be more deliberate about the permissions they grant to their AI tools.

What AI can do for your finances

Many AI applications are in development or already in use. Here are some notable examples:

• Monarch Money: A tool for budgeting and tracking net worth.
• Cleo: A chat-based financial assistant offering budgeting insights and financial coaching.
• Fidelity Investments: AI-powered tools that offer investment options and strategies.
• Mastercard: Testing AI systems that can directly make purchases on your behalf.

These tools can make life easier by handling repetitive tasks, analyzing spending habits, and even providing investment recommendations. However, they also require access to sensitive financial data, raising questions about privacy and security.

The risks of letting AI handle your money

While AI can be a valuable resource, Gellers underscores the importance of setting boundaries. For instance, although AI is not currently considered a fiduciary, some tools are increasingly taking on financial decision-making tasks. This raises questions about accountability — if AI makes a mistake, who is responsible?

Without clear lines of responsibility, consumers may find themselves in awkward situations. For example, if an AI-powered investment tool advises a bad trade, no human financial planner can be held accountable. Additionally, users must consider what happens if they share too much sensitive information, like Social Security numbers, bank logins, or tax records. The risks include privacy violations and exposure to cyberattacks.

Best practices for using AI in your financial life

If you’re considering integrating AI into your financial management, keep the following tips in mind:

• Never share sensitive information: Social Security numbers, bank passwords, and tax documents should not be uploaded to any AI tools.
• Use AI as a supplement, not a replacement: For significant financial decisions, human expertise remains invaluable. AI tools can be an excellent starting point but should not act autonomously.
• Regularly review your permissions: Understand what data the AI tool is able to access and revoke permissions as necessary.
• Be cautious with investment tools: While some AI systems offer stock-picking algorithms, they should be used in conjunction with professional advice rather than relied on entirely.

Looking ahead: The future of AI and finances

The integration of AI into personal finance isn’t slowing down. Companies like Mastercard and others are rapidly advancing their technologies to make financial management more seamless. Gellers predicts that while fully autonomous AI financial systems may still be a few years away, consumers will begin to see increasing "AI creep" — the use of AI in ways they might not even realize.

For consumers, the most important factor will continue to be control. Deciding how much financial autonomy to grant AI tools should depend on individual comfort levels and a clear understanding of the security risks. While these tools can save time and simplify decisions, safeguarding your personal information and keeping a human advisor in the loop remain crucial.

FAQs

Is it safe to let AI manage my finances? AI tools can be safe when used responsibly, but sharing sensitive data like bank passwords or Social Security numbers should be avoided.

What is agentic AI? Agentic AI refers to systems capable of acting autonomously on your behalf, such as making purchases or scheduling payments.

Are there AI tools for investing? Yes, platforms like Fidelity Investments offer AI-powered investing tools, but these shouldn’t replace advice from qualified financial planners.

What’s the main risk of relying on AI for money management? The key risks include loss of privacy, exposure to data breaches, and the lack of accountability if something goes wrong.

How will AI in finance evolve in the next few years? AI systems are expected to become more sophisticated and integrated into daily life, automating more financial decisions. Consumers must stay informed to decide their comfort levels with these tools.