How AI is Changing the Game with Financial Finesse’s Liz Davidson

Financial Finesse is making great strides in this area, and she explains how they’re doing it and why AI has so much potential to provide safe and accurate financial education to plan participants.

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Click to read the audio transcript here.

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Brian Anderson: [00:00:00] This is 401(K) Specialist Editor-in-Chief Brian Anderson and this is the 401(K) Specialist podcast. Artificial intelligence is a hot topic pretty much everywhere these days, and of course that includes the financial services industry and by extension the ever growing financial wellness market. Today we’ve got a high profile financial wellness pioneer who is also an early adapter on the AI front here to tell us about how AI in finance is changing financial services, the need for trusted, safe, and effective financial wellness coaching, and how innovative AI tools can be a game changer.

We’re going to cover it all right after this brief message.

Today, we’re very happy to have Liz Davidson, founder and CEO of El Segundo, California based Financial Finesse as our guest on the 401(K) Specialist podcast. Welcome, Liz.

Liz Davidson: Thanks for having me.

Brian Anderson: Anyone familiar with financial wellness is probably familiar with Liz and Financial Finesse.

What you may or may not be familiar with is just how deep into the artificial intelligence [00:01:00] pool that Financial Finesse has already waded. A couple of years ago now, the company developed a first of its kind AI in finance powered virtual coach dubbed AIMEE, an acronym which stands for Artificial Intelligence Motivating Employees Everywhere.

Just a couple of weeks ago, the company was honored to be named the best personal finance platform in the 2024 Fintech Breakthrough Awards, thanks to AIMEE. So Liz, I’m wondering if you can start out by telling us a little bit more about your award winning AIMEE.

Liz Davidson: It’s really amazing what AI in finance enables you to do and the exponential capabilities that it brings.

So what AIMEE does is really. Enables mass personalization. So she gets very deep in her understanding of individual end users through, both questions that she’s asking as well as questions that they’re asking her, and [00:02:00] is able to create an incredibly personalized experience that includes an action item content that is recommended, based on how that person has interacted with AIMEE and with our overall digital financial wellness hub and then, ongoing, notifications and messages to prompt action, which are again, incredibly personalized. And I’ve always felt that, people’s favorite topic. Is not application. It’s not finance, not even financial planners, it’s themselves, right?

And so this really represents a major shift from looking at finances and kind of buckets of topics or even broadly in life events or by demographics. and really, getting to know each and every end user on an intimate basis, and being able to do that at scale. So you can impact [00:03:00] digitally, through AI in finance, millions of lives in a way that you never could before.

To really change behavior.

Brian Anderson: Interesting. earlier this year at the Viking Cove Institute Leaders Summit, you talked about how you see AI as an entry point to better understanding rather than replacing the advisor’s role. Can you tell us a little bit more about that?

Liz Davidson: Yeah, absolutely. So we have, financial coaches.

We’re a financial coaching company. We do not deliver financial advice and we actually partner with advisors who employers that want a combined solution so that, we can work with a rank and file employees and then get them to a place where they’re ready for the advisor and, make that handoff appropriately with our coaches, even though they’re not advisors, they are CFPs and they’re coaching people, just coaching a different population. And what we’ve found is [00:04:00] that it is a circular kind of, experience where someone goes in chats with AIMEE and then is prompted to chat with the coach and they’ve gotten more comfortable at that point and then they can literally chat with a coach so a actual coach then call a coach and so we’ve seen that the technology is actually Increased our call volume by 40 percent year over year among the students It’s the same group of clients, which is pretty significant.

The other thing it’s done is with the user’s permission, we’re able to access, where they’re at from what they’ve, the data they’ve given us in terms of, what they’ve done financially, what their key issues are. So the conversations are much more elevated and that discovery process can be much shorter.

On top of [00:05:00] that, we’re, the coaches are able to then. put action steps back into AIMEE so that, after coaching session, I can go back into AIMEE, check off the action step and progress in my journey. And it’s just been, we’ve seen, wow, it’s been about 200 percent growth and engagement of AIMEE, but 40 percent growth of engagement on the coaching.

And it’s just, it’s been a game changer for our business and our clients. And just the results we’ve been able to affect with employees. So they go together, and there’s tremendous efficiencies as well. we do have a platform that is able to pre populate, emails to our end users based on, the phone call and their records and all of that.

So it’s, starting from a pretty relevant point [00:06:00] and then the coaches are adapting that. follow up email and action plan instead of starting from scratch, every single time. And that’s been great as well. It’s allowed them to really focus on what they do best, which is having these incredible conversations.

Brian Anderson: Sounds like AIMEE’s been very busy. when dealing with financial matters, there’s obviously a pronounced need for accuracy. So can you tell us about your safe approach, a safe approach to AI and how it prevents AIMEE from providing any erroneous information?

Liz Davidson: Yeah, absolutely. we’ve been on this journey of AI for over two years now, before chat GPT was, well known, certainly.

so it takes, a whole lot of time to get to where we’ve gotten. But what we decided to do early on, Even though we knew it would [00:07:00] require much more work was building closed system where we’re using a I transformer platforms to interpret financial questions, but those questions are all connecting to answers from articles that are CFPs.

Financial coaches have written have vetted and, have also evolved and changed and elevated because sometimes you’re taking something from an article is not the best way to answer questions. So what’s fascinating is this is the other side of AI. The human training on this thing was, we’re talking tens of thousands of hours of really, getting it right and, anticipating.

All the different questions people might ask based on, the data we’ve had from financial coaching questions, from AIMEE and so forth. So [00:08:00] it, it took a long time to get to that point. Now we’re at an exponential point because we have the foundation and the AI itself is getting smarter. So it’s better able to.

answer the questions based on what it’s learned about which question, what are the patterns in the questions that are good. Versus bad, and so forth. So it’s even able to fact check itself. It’s, fascinating.

Brian Anderson: That’s amazing. now from more of a 10,000 foot view, how is, how is AI in finance changing financial services?

and how far along are we in this transition? what are some of the risks and opportunities it’s bringing about for advisors in particular? And is it truly a potential game changer? Are you seeing that?

Liz Davidson: Yes. it’s absolutely a game changer. I think. This is, very comparable to, and maybe even more powerful than, the internet, right?[00:09:00]

Becoming a thing, that we all had to adapt to and. I feel like it’s just, a very pivotal crossroads. And I think everyone, would say that, frankly. I think what is exciting is I’m starting to see more advisors move from. a fear of this to embracing it. I think it goes fear, acceptance, that okay, it’s here, it’s not going away, and it’s going to advance, and then embracing. And those that have embraced it are starting to think about how to use it for practice management.

And we’ve seen a lot of advisors using it in [00:10:00] similar ways that I talked about, where You know, it can draft emails, it can consume documents and information, and give you the ability to ask and answer questions, that otherwise might, be very difficult to go through all of that.

documentation on your own. So we’re seeing, implementation on the back end for efficiency. We are not seeing as much on the front end. And I think the challenge the financial services industry has in terms of, delivering AI to consumers is compliance. And that is going to be a really difficult challenge.

It’s going to require a closed system, whether it’s ours or anyone’s, it’s gotta be a closed system and there’s gotta be a vetting process in place because using open AI, [00:11:00] to answer financial questions, all you need is one or two of those to really be categorized as advice and be wrong.

And you have a huge problem on your hands.

Brian Anderson: Definitely some legal, issues there. all we’re obviously still in the early stages of AI in finance adoption and it’s a rapidly developing field. Can you talk a little bit about the future and what’s next on the AI front for Financial Finesse?

Liz Davidson: we, so we have this underlying data model that. I don’t know why, but it’s called Zeppelin. and it has the ability to track all interactions a user has made with AIMEE and with Financial Finesse in general. And then it, we’re starting to leverage it to further personalize.

We’re just at the beginning stages of. [00:12:00] where that potentially could go. and also making the pattern recognition part of that. so that, we start to know things that like if you go through this type of user journey, in general, this is going to be the next best thing for you to receive, as, a notification or an action step.

So it’s, process of taking what we’ve built and, much more deeply personalizing. The good news is the foundation is there. it’s, a quick, it’s very interesting. This whole process. It’s if you’ve ever been like on a construction site for a house, and a lot of times the things that look ugly and look like they take a lot of work are don’t.

So you’ll walk in, And you’re like, Oh, there’s [00:13:00] this isn’t finished and there’s these wires hanging out and this doesn’t look like it’s done. And then Two weeks later, it’s a beautiful house, right? Cause the foundation was all done. And I’m not trying to liken AIMEE to the, the visual impact of that.

But my point being that, the hardest part of this whole process is building the right foundation. Because if you do there are exponential gains that, just start multiplying off of it.

Brian Anderson: this is, this is all very fascinating to me and I really appreciate you taking the time to share your insights on AI in finance with us today on the 401(K) Specialist podcast.

Liz Davidson from Financial Finesse. Thanks for joining us today.

Liz Davidson: Thank you.