The emotional side of financial planning decisions is beyond the tech's abilities so far
If financial planning was purely a process, a set of algorithmic calculations that determined how to manage money, then artificial intelligence would win every time.
But despite a significant number of Canadians saying that they are using the tech to help them keep on top of their finances, more than two thirds of participants in a new BMO poll say AI lacks the ability to consider the emotional influence on decisions.
One third of respondents said that they are currently using AI for aspects of their financial management, including learning about personal finance topics (45%), creating/updating household budgets (43%), identifying new investment strategies (42%), building savings (40%), or for creating/updating financial plans (40%).
More than half believe AI can help people make more informed financial decisions (52%) and makes financial planning more accessible for everyone (51%).
Among those who do not currently use AI in their financial planning, roughly 20-30% said they are considering doing so including 22% who may use it for retirement planning.
The importance of AI in Canadians’ lives today, beyond financial management, is also highlighted with 54% it to ask questions about topics of interest and 37% using the technology for data analysis. Business, travel, exercise, meal planning, and creative processes are all use cases for AI.
BMO’s Real Financial Progress Index found that 85% of Canadians believe they are making real financial progress, with 78% of these confident in their financial situation and 44% saying that AI-powered tools can help them make real financial progress.
Gen Z most engaged
Perhaps unsurprisingly, the youngest cohort of Canadian adults are most engaged with AI as a financial planning tool.
More than half of Gen Z respondents are using AI to help them manage their finances and investments, and for upcoming financial milestones. This generation is trying to navigate their new reality of managing their own finances with 91% concerned about their overall financial situation as the leading source of financial anxiety, followed by fear of unknown expenses (90%), housing costs (86%), and keeping up with monthly bills (82%).
Gen Z is also more likely to say that AI can help them make informed financial decisions and make real financial progress.
