Should you allow AI to examine your internet spending patterns?

Artificial intelligence (AI) is already a reality and is being used by many people in the backdrop of their everyday financial management; it is no longer a sci-fi idea. But should you make all of your financial decisions with AI? Or is a smart assistant the ideal use case for it?

IndiaToday.in interviewed Manish Mohta, the founder of Learning Spiral, and Sameer Mathur, MD and founder of Roinet Solution, to determine whether AI should guide your financial choices or just serve as an intelligent helper at your side.

WHAT IS THE REAL PURPOSE OF AI?

Spending solutions that use artificial intelligence analyze all of your online transactions and search for trends. They identify when and where you tend to spend more money, rather than just how much you spent last month.

These technologies are able to quickly analyze vast amounts of transactions and identify patterns that people frequently miss. AI can immediately process enormous amounts of transactions, detecting expenditure trends and locations where expenses can be cut, as Mathur demonstrates. Additionally, it can tailor financial insights according to a user’s lifestyle, assisting them in reaching their investment or savings objectives more quickly.

To put it another way, AI converts meaningless data into insightful knowledge. It links the dots for you by observing late-night restaurant orders, festival season indulgences, and weekend shopping.

In even simpler terms, Mohta says, “Consider AI as the financial counterpart of that ruthlessly honest friend who remembers every time you ‘accidentally’ ordered food at two in the morning. It reveals patterns that you would otherwise miss, such as seasonal trends, splurge expenditures, recency bias, and habitual habits.

ARE THE NUMBERS TRUE?

Assuming the data is comprehensive and appropriately labeled, the majority of AI systems available today analyze transactions with remarkable accuracy. Although sporadic misclassifications are still possible, Mathur notes that accuracy levels can go “above 90% in many cases.” “With clear inputs, these tools can be eerily precise, catching even that Rs 49 subscription you forgot existed,” says Mohta, who concurs.

But one thing is evident from both experts: AI is not flawless. The system may become confused by cash purchases, divided bills, or transactions with incorrect labels. Occasionally, a human check is still required.

DATA PRIVACY: WHAT ABOUT IT?

Because financial data is so sensitive, consumers must exercise caution. Reputable AI technologies adhere to stringent privacy guidelines and legal frameworks, like the General Data Protection Regulation (GDPR) and the RBI. Users should only use services that “have clear privacy policies and use bank-grade encryption,” cautions Mathur.

Manish even goes so far as to say, “Go on if their terms seem like a jigsaw puzzle you don’t want to solve.” Look for end-to-end encryption, openness, and the ability to remove your data whenever you choose.

DO YOU NEED AI TO CHOOSE YOUR FINANCIAL ACTIONS FOR YOU?

According to both experts, AI should serve as a co-pilot rather than the pilot. Mathur calls it a “supplementary tool”, while Mohta compares it to a “GPS that highlights risks but doesn’t choose the destination for you.”

AI functions best when combined with human judgment. You alone are aware of your true objectives, family plans, and risk tolerance, but it can offer guidance, highlight warning signs, and remind you of hidden expenses. Instead than using technology to make decisions for you, think of it as an intelligent tool that helps you make decisions.

To put it simply, AI excels at analyzing data, seeing trends, and providing prompt financial feedback. For those who wish to better understand and manage their expenditure, it is the ideal helper. AI and human comprehension can work well together as a financial team.