CAN AI IMPROVE YOUR FINANCIAL LIFE?

ChatGPT and other artificial-intelligence tools will streamline certain tasks, but don't count on them to get everything right.

- BY LAURA PETRECCA

LIKE it or not, artificial intelligence is becoming increasingly embedded in our daily lives—including how we manage our money. From budgeting apps that offer personalized tips for reducing expenses to bank chatbots that deliver account details 24/7, a growing number of companies are incorporating AI into their financial tools and services. At the same time, many people are using conversational chatbot platforms, such as ChatGPT and Claude, for guidance on everything from rolling over a 401(k) to maximizing the benefits of a health savings account.

When used with care, AI can help us make better financial decisions. But it can also provide misleading and false information, as well as empower criminals to create sophisticated scams. (For more on how fraudsters are leveraging AI, see “Guard Against the New Generation of Fraud and Identity Theft,” on page 40.) And right now, AI remains largely unregulated. A recent Pew Research Center survey found that 55% of U.S. adults and 57% of AI experts want more control over how AI is used in their lives.

So it pays to be vigilant—especially when you're using generative AI platforms such as ChatGPT and Claude that are powered by large language models. (LLMs, which are “trained” on data from a wide range of sources—such as website content, news articles and academic papers—can understand context and respond in a relevant, human-like manner.)

“New legislation will ultimately have to be introduced to protect consumers as we interact with these LLMs,” says Andrew Lo, a professor of finance and the director of the laboratory for financial engineering at the MIT Sloan School of Management. “But until that day comes, I would encourage people to be very careful.”