2020 has changed our relationship with money as people are now trusting robots more than themselves to manage their finances, according to a new study by Oracle and Personal Finance Expert Farnoosh Torabi.
The study of more than 9,000 consumers and business leaders in 14 countries found that the COVID-19 pandemic has increased financial anxiety, sadness and fear among people around the world and has changed who and what we trust to manage our finances. In addition, people are rethinking the role and focus of corporate finance teams and personal financial advisors, according to the research.
COVID-19 has created financial anxiety, sadness and fear
The global pandemic has damaged people’s relationship with money at home and at work.
Among business leaders, financial anxiety and stress increased by 186% and sadness grew by 116%; consumer financial anxiety and stress doubled, and sadness increased by 70%.
The report revealed that 90% of business leaders worry about the impact of COVID-19 on their organisation, with the most common concerns focusing on a slow economic recovery or recession (51%), budget cuts (38%) and bankruptcy (27%).
87% of consumers are experiencing financial fears, including job loss (39%); losing savings (38%) and never getting out of debt (26%).
These concerns are keeping people up at night: 41% of consumers reported losing sleep due to their personal finances.
People see robots as a better way to manage finances
The financial uncertainty created by COVID-19 has changed who and what we trust to manage our finances. To help navigate financial complexity, consumers and business leaders increasingly trust technology over people to help.
67% of consumers and business leaders trust a robot more than a human to manage finances.
73% of business leaders trust a robot more than themselves to manage finances; 77% trust robots over their own finance teams.
89 percent of business leaders believe that robots can improve their work by detecting fraud (34%); creating invoices (25%) and conducting cost/benefit analysis (23%).
53% of consumers trust a robot more than themselves to manage finances; 63% trust robots over personal financial advisors.
66% of consumers believe robots can help detect fraud (33%); reduce spending (22%); and make stock market investments (15%).
The role of finance teams and financial advisors will never be the same
To adapt to the growing influence and role of technology, corporate finance professionals and personal finance advisors alike must embrace change and develop new skills.
“Managing finances is tough at the best of times, and the financial uncertainty of the global pandemic has exacerbated financial challenges at home and at work,” said Farnoosh Torabi, Personal Finance Expert and host of the So Money podcast. “Robots are well-positioned to assist – they are great with numbers and don’t have the same emotional connection with money. This doesn’t mean finance professionals are going away or being replaced entirely, but the research suggests they should focus on developing additional soft skills as their role evolves.”
56% of business leaders believe robots will replace corporate finance professionals in the next five years. 85% of business leaders want help from robots for finance tasks, including finance approvals (43%); budgeting and forecasting (39%); reporting (38%); and compliance and risk management (38%).
Our relationship with money has changed, it’s time to embrace AI to manage finance. The events of 2020 have changed the way consumers think about money and have increased the need for organisations to rethink how they use AI and other new technologies to manage financial processes.
60 percent of consumers say the pandemic has changed the way they buy goods and services. “Financial processes in our personal and professional worlds have become increasingly digital for many years and the events of 2020 have accelerated that trend,” said Juergen Lindner, Senior Vice President, Global Marketing, Oracle. “Digital is the new normal and technologies such as Artificial Intelligence and chatbots play a vital role in managing finance. Our research indicates that consumers trust these technologies to accelerate their financial well-being over personal financial advisors and business leaders see this trend reshaping the role of corporate finance professionals. Organisations that don’t embrace these changes risk falling behind their peers and competitors, hurting employee productivity, morale and wellbeing and struggling to attract the next generation of AI-empowered finance talent.”Click below to share this article