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Rise of RoboAdvisors: Building a Personal Financial Advisor App

Staff Writer

Recently, United Overseas Bank of Malaysia announced it launched a new AI-driven personal finance service for customers. The steadfast rise of RoboAdvisors is the next disruptive force for personal finance. And, the speed at which it is being adopted by businesses around the world highlights the need for mobile developers to keep pace.

Proactive vs. Reactive Personal Finance Tools

Most financial tools on the market today are simply reactive, even though they claim to be cutting-edge. Most of them still leave it up to the individual or business to sort things out manually. But, that is so 20th-century. The ability to anticipate and learn from the client's spending habits to proactively advise them on ways to improve their financial situation is where the big opportunities are.

For ages, PR and marketing firms have spent billions of dollars to study how our emotions affect spending habits. And, they have been quite successful at manipulating our emotions to entice us to spend more than we probably should. In fact, a survey by NerdWallet found that 49% of Americans admit to emotionally-driven overspending. But, as RoboAdvisors become smarter, they will help teach people better spending habits and to recognize patterns within themselves that lead to bad financial decisions.

How to Build an AI-Driven Personal Finance App

The dominant factor that sets an AI-driven finance app aside from the rest is its ability to learn. The better it can learn, the more useful it will be for clients. Therefore, the most important feature is a quality neural network to process the data collected on your app. But, in order to create the type of app that blows all others out of the water, other essential features should include:

  • Managing big data — Your app must be able to sift through both structured and unstructured raw data flawlessly. Organizing that information into useful charts and dashboards to provide the best UI will increase user retention.
  • Tracking investments and loans — Integrating APIs from popular investment apps and lending institutions will boost financial visibility and provide a better overall view of the user's finances.
  • Ability to save or invest automatically — Teach the RoboAdvisor to automatically transfer funds to a user's investment or savings portfolios based on either user-defined parameters or using intelligent analysis.
  • Managing bills — Auto bill pay or in-app bill pay features can help users never miss a due date again.
  • Scan for fees — Your RoboAdvisor should scan through a user's financial data to find and recommend ways to cut unnecessary spending on fees like those associated with a 401(k) or investment portfolio.
  • Conversation engine — Using a Natural Language Processing engine can keep users engaged when they have questions about recommendations.
  • Tracking credit scores — Integrating this feature can help users protect themselves from fraud while also seeing how their intelligent spending choices recommended by the app is improving their score.
  • Financial coaching — Using predictive analytics, this is the culmination of all of the above features. Based on all the information gathered, your AI-driven personal finance app can predict users’ spending behavior to curtail bad habits.

Key Take-Aways

  • The richer the features incorporated into your AI-driven personal finance app, the greater the user retention and satisfaction.
  • Finding more innovative ways to incorporate new features will add to your app's success.
  • Form strategic partnerships to gather more essential data and create better recommendations.
  • Understanding user emotions can help you build your app to be more responsive to their habits.