AI-Based FinTech: Good or Bad for Money Decisions and Financial Well-Being?
Financial technology (FinTech) based on Artificial Intelligence (AI) is today a staple in the life of many consumers, due to the benefits such as ease of access, convenience, and low fees. However, is FinTech unanimously good for the consumer? While FinTech has the potential to help individuals achieve their financial goals, it may also hurt the most vulnerable groups of financial consumers: those that habitually avoid financial information and those with low financial literacy. Furthermore, while the increasing personalization of data supplied to AI algorithms may produce more fitting financial aids, it can also be rejected or ignored by consumers.
In this project, it will be investigated when and for whom AI-based Fintech is good and when and for whom the same technology is bad. Together with a very strong industrial partner (Dreams AB) that uses FinTech and AI-solutions to provide financial services such as personal savings and loan repayment, we examine the hypothesis that AI-based FinTech impacts different customers differently. More specifically, we will classify individuals based on individual differences in cognitive biases into engaged and unengaged users and examine the acceptance and the use of AI-based FinTech with increasing personalization levels in these groups. We will focus on how such technologies impact financial decisions and the financial well-being of the engaged and unengaged user groups.
This project has wide-reaching benefits. It has important ramifications for the promotion of good financial well-being and the development of ethical financial practice. From a societal perceptive the use of AI applications to aid financial decisions is also a matter of inclusivity. An understanding of the barriers to using AI-assisted FinTech can help to identify means of increasing participation. At the same time, it increases the competitiveness of Swedish FinTech companies in the global arena.
Pricipal Investigator: Kinga Barrafrem, Linköping University
Co-Principal Investigator: Pär Bjälkebring, University of Gothenburg
Co-Principal Investigator: Elin Helander, Dreams AB