2020 has changed our relationship with money, and people now trust 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 across 14 countries including India found that the COVID-19 pandemic has increased financial anxiety, sadness, and fear among people around the world; changed who and what we trust to manage our finances; and is reshaping the role and focus areas of corporate finance teams and personal financial advisors.
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%.
- 90% of business leaders are worried about the impact of COVID-19 on their organization, with the most common concerns being 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%).
Amongst Indian consumers, 90% are experiencing financial fears, including job loss (34%), losing savings (47%), and never getting out of debt (21%).
People want help and now trust robots more than themselves 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.
- 83% of Indian consumers and business leaders share this belief.
- 73% of business leaders trust a robot more than themselves to manage finances; 77%trust robots over their own finance teams.
- 88%, of Indian business leaders trust a robot more than themselves to manage finances; 85% trust robots over their own finance teams.
- 89% of business leaders believe that robots can improve their work by detecting fraud (34%), creating invoices (25%), and conducting cost/benefit analysis (23%)
- Almost every Indian business leader (96%) believes that robots can improve their work by detecting fraud (37%), creating invoices (32%), and conducting cost/benefit analysis (30%).
- 66% of consumers believe robots can help with managing finances by assisting to detect fraud (33%) helping to reduce spending (22%), and making 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 must embrace change and develop new skills.
- 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%).A whopping 93% of Indian business leaders want assistance from robots for finance tasks, including finance approvals (58%), budgeting and forecasting (49%), reporting (38%), and compliance and risk management (50%).
- 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 organizations to rethink how they use AI and other new technologies to manage financial processes.
- Majority of Indian business leaders (94 %) agree that organizations that don’t rethink financial processes will face risks, including falling behind competitors (46 percent), more stressed workers (45 %), inaccurate reporting (42 %), and reduced employee productivity (44 %).
- Businesses have been quick to respond. 69% of global business leaders have invested in digital payment capabilities. 64%of global business leaders have created new forms of customer engagement or changed their business models in response to COVID-19.
- 93%of Indian business leaders have invested in digital payment capabilities and 81% of Indian business leaders have created new forms of customer engagement or changed their business models.
“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.”
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. Organizations that don’t embrace these changes risk falling behind their peers and competitors; hurting employee productivity, morale and well-being; and struggling to attract the next generation of AI-empowered finance talent.”
(Image Courtesy: www.roboticstomorrow.com)