Abstract

The conversational artificial intelligence (AI) is creating a revolution in the landscape of personal finance management (PFM). Further than classical interfaces in banking, conversational AI (including chatbots, virtual assistants, and voice-driven services) is transforming the way in which people communicate with financial services. The paper examines the developments of conversational AI systems in the context of personal finance and its potential to better understand a conversational AI and innovative ways to empower the optimal personal-financial expansion of users of conversational AI systems, and its specifics in the development of personal finance. These systems help in visualising real-time data on spending and budgeting, investments, and financial goals tracking using natural language processing, machine learning and predictive analytics, enabling the user to make more informed decisions. Compared to typical banking applications, conversational AI can offer an intuitive, conversational experience, whereby a user can access financial management skills without having to access complicated interfaces. This study considers case examples of financial giants and fintech startups using AI-based PFM technology and how they lead to user engagement, financial literacy, and operational efficiencies. Besides that, the paper examines the issues regarding privacy, data security, algorithmic bias, and compliance with regulation, focusing on the importance of designing ethical and transparent AI. The results indicate that conversational AI could democratize the management of financial data and give its user generate actionable insights, but its use must be supplemented with trust, ease of use, and inclusivity in mind. Transcending the previous frameworks of the banking system, conversational AI represents not only a technological advancement, but a paradigm shift to personal finance, as the more proactive and knowledgeable manner of managing finances. This paper ends with suggestions regarding how to incorporate conversational AI into everyday financial services and the areas of future investigation that should take place to meet a changing user experience requiring and regulatory environment.