As has been the case historically, powerful emerging technologies have the unprecedented potential to shape the future of people’s financial lives, often in ways that will be with us for decades or longer. Next generation technologies such as big data- powered artificial intelligence, machine learning, and blockchain/distributed ledger solutions can provide new opportunities for building financial security and opportunity, but may also carry new risks if not developed without including the needs of people living on low to moderate incomes (LMI).

Because of their rapid adoption by financial services organizations and consumers, conversational AI technologies such as virtual assistants and chatbots are a key place of intersection between the promise of emerging technologies and the needs of financially vulnerable Americans. The Covid-19 pandemic has also accelerated these changes. As financial institutions closed their physical bank branches, many people moved their money management online. And more Americans interacted with financial apps, chatbots, and virtual assistants than ever before. These trends seem likely to continue even as physical branches re-open. 

As part of our work on emerging technologies, Commonwealth surveyed 1,290 people living on LMI, oversampling for women and Black and Latinx people, on their perceptions, needs, wants, and uses of conversational AI. Our new report summarizes findings from the survey and follow-up qualitative interviews, explores the trust and comfort level of financially vulnerable people in interacting with conversational AI, and identifies the opportunities for the financial services industry to leverage these technologies to meet the needs, wants and aspirations of this consumer segment. 

Key Findings

• Use and trust of chatbots by low- to moderate-income households has increased dramatically since the COVID-19 pandemic. Individuals surveyed during COVID-19 were over two times more likely to report having interacted with a chatbot than participants surveyed prior to the pandemic. The majority of interview participants also shared that they would continue with the banking practices they adopted during COVID-19 even after banks and bank branches reopened. 
• Use of financial apps and tools is widespread across all demographics, with investing apps being the most commonly used. This suggests a general willingness to engage with a wide variety of apps and digital financial tools—for growing savings, managing debt and expenses, investing—across demographics. Black and Latinx respondents reported the highest level of trust in AI recommendations and were most comfortable with using conversational AI, especially post-pandemic.
• There is a link between demographics and conversational AI advice preferences. Depending on one’s demographic, preferences included interest in advice on growing savings, managing debt/expenses, investing, and/or no interest in receiving any advice from a chatbot.
• People turn to financial apps in light of financial hardship. People who self-identified as experiencing a recent financial hardship were three times more likely to use financial apps than those who did not report a recent financial hardship. 
• Financial fragility impacts use and trust of conversational AI. Survey participants who are more comfortable financially are also more comfortable with conversational AI. Participants who described their financial situation as “just getting by” were more likely to prefer options that allow them to easily connect with a human agent. 
• Some concerns around use of conversational AI remain. Our in-depth interviews found that the use of conversational AI brought up concerns such as security, the fear of being misunderstood, and uncertainty that their needs would be met. Addressing these concerns presents an opportunity for improving customer engagement

To learn more about our findings and insights from this research, download our new report Conversational AI’s Pivotal Role in Improving Financial Security and Opportunity here. 

As we continue our research and pilots in conversational AI and other emerging technologies, Commonwealth is partnering with fintechs, conversational AI providers, and financial institutions to conduct field tests aimed at improving engagement and usefulness for low- to moderate- income Americans. If you are a fintech or financial services firm and would like to learn more, please contact Gosia Tomaszewska at gtomaszewska@buildcommonwealth.org or Paula Grieco at pgrieco@buildcommonwealth.org.