Seventy-seven percent of Americans experience financial stress, making the consumer personal finance market appealing to new entrepreneurs. However, despite the numerous startups in this space, they have not been able to fully transform people's financial lives. The main reason for this is the significant gap between consumer expectations and the actual capabilities of personal finance products. Most digital personal financial managers (PFMs) focus on providing insights about users' finances, at best helping them discover new products or behaviors. While this can be helpful, it requires users to invest time, effort, and money to follow through and make necessary adjustments. Personal finance is a complex and emotionally charged subject, often avoided in conversations. Consumers want a solution that not only fixes their financial issues but also keeps them on track in the long run. Thanks to generative AI, the concept of "self-driving money" finally has the opportunity to fulfill its potential. Imagine a platform that can optimize your financial position by moving your money strategically. In the past, such functionality wasn't possible as existing products were limited to providing information and analysis without taking action on behalf of the users. With the advent of generative AI, consumer financial platforms are now operating in a new world. Language models (LLMs), such as GPT-4, can process and generate both text and images. This enables consumer robot process automation (RPA), allowing fintech apps to take actions on behalf of users. This significantly expands the possibilities for user interactions with personal finance products, both in terms of input (what the product can analyze) and output (what the product can do for the user). For example, Google's Bard can analyze a screenshot of an investment account balance, calculate investment returns compared to the market, and provide valuable insights. Bard has only been live for a few months, so its functionality is expected to improve over time. As a result, startups are expected to deliver on the promise of financial automation, offering products that act as "autopilots" to help consumers save and spend. In addition to optimizing assets within specific categories, there may even be the emergence of a comprehensive financial super app that acts as an autopilot across various product categories.

This would allow users to manage their finances effortlessly and automatically allocate their money as their circumstances change. Importantly, consumers won't need to change providers, as the app will integrate with their existing apps and accounts. Successful companies in this space will look different from traditional consumer finance companies. They will focus on providing a fast and seamless onboarding process and offer a "set it and forget it" experience. The success of these products will be measured not by consumer engagement but by the amount of trust consumers place in them to manage their finances over time. This marks the beginning of a new era in consumer finance, where AI will revolutionize various product categories. AI is expected to first disrupt high-friction areas that are currently labor-intensive and low-judgment tasks that can be easily automated. Consumers will be eager to try new products that solve specific pain points, while AI will have a higher chance of delivering a positive user experience. For instance, AI-powered "refi robots" could transform the debt refinancing process, which is currently seen as time-consuming and complicated. These "refi robots" can scrape data from multiple accounts, find the best refinancing options, and even complete the application process on behalf of users. This has the potential to save users thousands or tens of thousands of dollars over time. Startups that offer these automated refinancing solutions will pose a significant challenge to established players who rely on inefficiencies for profit. These new products may include consumer apps where users can connect their debt and let the AI-driven process unfold automatically. Infrastructure providers, including switching APIs and debt repayment platforms, are also expected to offer automated refinancing capabilities to their users. Additionally, real-time auctions could be established where credit facilities compete to acquire consumer debt. If you're working on an AI solution for personal finance or debt refinancing, we'd love to hear from you. Please reach out to us at [email protected] and [email protected]