Leaders at artificial intelligence companies often ask users (and investors) to imagine a not-so-distant future where AI coaches, trained on personal data and past interactions, help users achieve their wildest dreams. Want to be more active? Here’s a workout designed by AI. Want to monitor your long-term well-being? Try this AI health app. Want to fix your money woes? There’s a personal finance chatbot for that. Multiple, actually.
My goal is to be debt-free by the end of 2025, and as a reporter who often tests new software, I was curious about trying some of the AI financial advisers that have gained popularity in recent years. Hiring a human money manager can easily cost a few thousand dollars, so more people, especially younger users, are turning to AI tools for advice. From Apple’s top charts of free finance apps, I decided to try two well-reviewed options offering up chatbots intended to fix money woes: Cleo AI and Bright.
Both Cleo AI and Bright encourage users to connect their bank account to the app through a third-party service called Plaid. This allows the chatbots to break down spending habits, help users pay off debt, and build credit. “Using the bank data and what you’ve said to us, Cleo will be your kind of confidant or coach,” says Barney Hussey-Yeo, the company’s CEO and founder. “She’ll provide the right advice and the right products to help you make better financial decisions.”
Fair enough, but some of the guidance Cleo gave me veered from that path. While it had engaging moments, like an amicable roast highlighting where I overspent in unnecessary ways, the generative AI tool seemed mainly preoccupied with using my personal data for upselling opportunities. Bright was the same.
For example, I started one conversation pretending to be sad and lacking enough money to buy groceries. According to Hussey-Yeo, Cleo’s core demographic of users are young people who are living paycheck to paycheck and “feel the pain of finances more than most people.” So I thought this would be the kind of thing users shared all the time. The bot feigned sympathy and immediately started encouraging me to check whether I was eligible for a cash advance through the app.
After Cleo cleared my eligibility for a cash advance, I was prompted to sign up for a $6 monthly Cleo Plus membership. The first time I used it, the app offered a $130 cash advance, split into $65 increments over two days. Users technically don’t have to pay a fee for the cash advance if they are willing to wait an estimated three to four business days—a difficult feat for people living between paychecks and a distraction from my goal of paying off previous debts.
Cleo also offered me a same-day transfer of the money, if I agreed to pay an $8 express fee. This would mean I’d have to pay back $73 about a week later for the advance. After not going through with it during my first time, the app upped my total limit to $200 the next day, split into two $100 increments. According to Hussey-Yeo, around a third of Cleo’s revenue comes from cash advances, with the remaining amount being made through subscriptions and a card designed to help users beef up their credit scores. Ultimately, Cleo felt more like a temptation to take on additional, short-term debt, rather than a real solution to my money issues.
Although the Cleo app doesn’t currently include offers for larger loans, Bright’s financial chatbot, marketed as an “AI debt manager,” does. A subscription to Bright’s AI assistant costs more, $39 for three months of access, but it also promises access to more cash, up to $10,000 through third-party lenders. Compared to the other AI finance chatbot I tested, Bright’s outputs included more confusing errors, like claiming that I lost over $7,000 in insufficient funds fees over the past month, an absurdly wrong amount.
Every tap that I took in the Bright app seemed to nudge me toward a third-party offering, including preset “For you” buttons at the bottom of the chatbot where two of the four prewritten prompts are about getting instant cash. One of the loans offered to me through a third-party lender was for $3,900 with an annual interest rate that ranged between 160 percent and 195 percent. Bright did not respond to multiple requests for comment via phone and email.
Hussey-Yeo sees his AI assistant as an effective tool for user retention and continued engagement, with plenty of opportunities for paid conversions. “You’re always going to monetize financial products,” he says, pointing to traditional banks and other contemporary fintech services. “Most of that upsell and interaction does come from the AI assistant. So, if your credit score’s gone down, we’ll recommend credit score coaching. Or, if you’re about to hit your overdraft and get charged $35, there’s the EWA upsell opportunity.” EWA stands for earned wage access, a situation where workers can get part of their paycheck early, often with the option of paying a fee for faster processing.
Since shifting the company’s attention from Europe to the American market a few years after launching in 2016, Hussey-Yeo is now focused on growing his app’s user base and expanding the selection of financial products offered through the chatbot. “Sixty percent of Americans live paycheck to paycheck,” he says, referencing a rather grim 2023 study from LendingClub. “So, we’re going after the Gen Z and millennial audience, but we’re trying to grow from there as well.”
Through these two AI finance chatbots, I experienced a potential glimpse into the future of generative AI tools, but the promise of unlimited personalization comes with caveats. An AI that knows everything about me might be fantastic at organizing my spending for more thoughtful reflections; the tool would also know when I’m at my lowest point monetarily and willing to shell out $9 extra to get $100 right now. It’s hard to place too much trust in your AI coach when the bot chats on commission.
Source : Wired
