The Embedded, Immersive Future of Personal Finance
Explore the evolution of personal finance management from PFM 1.0 to immersive experiences powered by AI and ML.
Ronen Assia, Managing Partner of Team8, delves into AI and ML’s potential in transforming the finance industry. PFM 1.0 nears its end, and a new field is emerging in immersive personal finance.
The recent announcement that Mint would be folded into Credit Karma ends the Personal Financial Management’s (PFM) 1.0 era. When Mint launched in 2006, it offered users the ability to combine all their accounts from disparate financial service providers, creating a holistic picture of their financial health through APIs. When Mint sold to Intuit for $170 million, all cash, in 2009, it was a big deal for the burgeoning personal finance management industry.
Now that the brand will cease to be and get folded into a credit score management app, it’s worth looking back at whether this era of financial management succeeded. I contend that Mint’s lackluster end, combined with the failure of the long tail of similar solutions that came after, demonstrated a clear gap between promise and execution: their approach did not understand the customer and their needs.
The good news is we are about to enter a new phase of personal finance. Let’s call it immersive personal finance, where the opportunity to truly impact people’s financial decisions and, therefore, lives will finally come to fruition.
Why PFM 1.0 Failed?
Like other product categories, wonky, tech-first early adopters surely loved Mint. Giving them the ability to see every transaction and code them through tags to create impressive pie charts and graphs that broke down their spending into as many categories as they wanted. If that sounds like the idea of fun, Mint was a godsend.
Beyond the valley of the adopters, a stark truth lay: that’s way too much tedious work for the average consumer. It was a clear case of developers developing for people like themselves. Too many customers let the data accumulate in their accounts without making meaningful progress or closing them altogether. The reality is that most consumers just hate dealing with their finances.
It’s important to note that these products aim to help us answer simple but incredibly important questions. For example, can I afford this house? Am I saving enough money for retirement? How much you spend on groceries is just a means to an end. An app that enables that will transcend Mint’s less-extensive budgeting mission to create something that can replace needing a financial advisor for many important questions.
While PFM 1.0 was a noble vision that ultimately failed, it’s not entirely the fault of those who failed. Many technologies that will set financial management free didn’t exist when Mint started 18 years ago.
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Immersive Personal Finance: AI, ML, Voice, and the Screenless Future
The good news is we have a new opportunity to get it right now. Thanks to not just generative AI but voice capture, machine learning, virtual reality, and virtual assistants, a whole suite of tools and technologies will finally make a PFM product people can use.
This was top of mind as I watched a viral keynote in mid-January announcing the Rabbit R1, an AI-driven pocket companion, mounting a challenge to the mobile phone that has dominated our pockets for more than two decades.
The R1 may look like little and struggle to compete against well-funded competitors, but its approach is fundamentally sound. Rabbit CEO Jesse Lyu contrasted how using the device for a prompt and answer, based on voice, was so much simpler and more powerful than scrolling through a phone of apps to get to the one you need before even typing in or speaking the request.
The reality is that people want to avoid looking at spreadsheets or pie charts or pouring through transaction records to categorize their expenses. Screen-based interfaces frequently resemble the overwhelming complexity of a Boeing cockpit, making them far too difficult for average users to navigate. They just want to know if they are saving enough or have the right allocations to improve their lives.
The Holy Grail for the next generation of PFMs is to transcend the tedium of the screen to simple yes/no/how answers.
How Will It Work in the Future?
For example, Gen AI can write a poem in Ancient Greek, but it will take some time to answer questions accurately, like the best 401k plan for my situation.
What happens then? Well, you can expect to see more and more financial services apps get bundled in the data layer into other offerings. The result will be a fully immersive financial experience, where customers can use a single application to engage with various financial services – they’ll be able to save, apply for a mortgage, and take out insurance all from one location.
It will crunch the numbers to deliver a definitive answer to any important financial question a user can ask. They’ll receive the response audibly through voice-activated generative AI – never having to look at a screen (if they don’t want to).
Of course, many people will still want to take these decisions to financial service professionals (who will undoubtedly be using even higher-grade ML and AI), but this will free up those who want to handle their own decisions.
I am personally very excited about the immersive personal finance era, coming soon once the technology catches up. Individuals will have more knowledge and control over their financial situation because of, not in spite of, the fact that they won’t have to pour over screens filled with data.
The Holy Grail is to be able to replace the financial advisor. With the right data and an algorithm that can make the right decision, savvy personal finance can be automated without you having to do much at all.
What AI tools have you used to increase your personal financial literacy this year? Let us know on Facebook, X, and LinkedIn. We’d love to hear from you!
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