Self-Driving Cars May Be Here, but Are You Ready for Self-Driving Banks?
Most people don't want to spend their free time calculating cash flow and budgeting expenses. As a result, the future of finance does away with manual budgets and cash forecasts, and will instead use algorithm-driven engines to allocate money where it yields the best results.
This automated future even has a name. Autonomous finance utilizes emerging technology, such as artificial intelligence and machine learning, to aggregate and streamline financial management. If you’ve ever wished for a technology platform that could automatically handle financial tasks, such as paying your bills and reallocating investments, you’re looking into the future of autonomous finance.
Before we get there, however, there are several evolutionary steps banks will need to take.
The Evolution of Autonomous Finance
While you may not have heard of autonomous finance, you are most likely aware of autonomous vehicles. The trend toward self-driving cars has been in progress for many years.
It began simply enough, with automated detection of potential hazards. As consumer trust and confidence in autonomy grew, auto manufactures began implementing autonomous functions at higher levels, such as parking assist.
The final stage of this evolution will result in fully autonomous vehicles which require no driver intervention, breaking down barriers between vehicle functions and drivers, to create a more seamless and safer roadway experience.
Autonomous finance is expected to do much the same for financial management, by eliminating many of the current barriers between spending, savings, debt and wealth management. At full autonomy, daily banking tasks would become automated across the consumer’s entire financial ecosystem.
In this environment, something as simple as making a purchase with a credit or debit card could start a chain reaction, as money is budgeted for the expense and maybe even moved into a special holding account to cover upcoming bills.
With autonomous finance, your bank will also know you better and even help to curate experiences to help you better manage money and grow wealth. It’s similar to how Spotify or Audible recommend future songs or purchases based on your past behavior.
While autonomous finance creates a more personal, comprehensive and efficient environment for monitoring finances and taking action, reaching full autonomy will take place in stages. For example, most financial institutions already allow customers to set up automatic transfers and deposits. During the next phase, banks could build on current capabilities to bring more functionality to their customers.
This evolutionary process is necessary for banks on a number of fronts, but primarily to meet their obligation to put customers first.
The Future of Autonomous Finance, What Lies Ahead
Similar to fully autonomous vehicles, self-drive banking has the potential to revolutionize personal financial management, offering automated solutions to handle both simple and complex tasks. As banks move toward autonomy, the goal is to meet the needs of consumers for every day financial management, but more importantly, to break down barriers and optimize cash flow.
One near-horizon example is a debt optimizer. This tool evaluates customer obligations and then advises on strategies to lower associated costs and pay off balances faster. In the final evolutionary phase, capabilities can be extended to automatically refinance loans as better rates become available.
For banks, autonomous banking is no longer a distant possibility. According to research conducted by Salesforce, most banks are taking steps to speed up implementation as consumers continue to seek more efficient and profitable ways to manage their finances.
For instance, at FNBO, we are currently envisioning the future of autonomous finance, but also working to identify available technologies that we could test and implement today. The process starts by gaining a better understanding of trends in both the financial and non-financial space to see how consumers are interacting, what they expect from those engagements and where we as a bank could do more to support the financial environment of our customers. Overall, we too are approaching autonomous finance in stages, reviewing the experience standards of our customers and taking action where appropriate to create a more seamless banking experience.
The articles in this blog are for informational purposes only and not intended to provide specific advice or recommendations. When making decisions about your financial situation, consult a financial professional for advice. Articles are not regularly updated, and information may become outdated.