The global pandemic has changed people’s relationship with money.
2020 has changed our relationship with money, and people now trust robots more than themselves to manage their finances, according to a new study by Oracle and personal finance expert Farnoosh Torabi.
The study of more than 500 consumers and business leaders around Australia found that the COVID-19 pandemic has increased feelings of anxiety, sadness, and fear; changed who and what we trust to manage our finances; and is reshaping the role and focus areas of corporate finance teams and personal financial advisors. This formed part of a larger study of 9,000 respondents across 14 countries.
COVID-19 has created financial anxiety, sadness, and fear
The global pandemic has damaged people’s relationship with money at home and at work.
- Among business leaders, financial anxiety and stress increased by 94 percent and sadness grew by 50 percent; consumer financial anxiety and stress increased by 111 percent and sadness increased by 75 percent.
- 81 percent of business leaders are worried about the impact of COVID-19 on their organisation, with the most common concerns being a slow economic recovery or recession (46 percent), bankruptcy (31 percent), and a fear of losing their job due to financial reasons (28 percent).
- 86 percent of consumers are experiencing financial fears, including job loss (39 percent), losing savings (38 percent), and never getting out of debt (29 percent).
- These concerns are keeping people up at night: 41 percent of consumers reported losing sleep due to their personal finances.
People see robots as a better way to manage finances
The financial uncertainty created by COVID-19 has changed who and what we trust to manage our finances. To help navigate financial complexity, consumers and business leaders increasingly trust technology over people to help.
- 55 percent of consumers and business leaders trust a robot more than a human to manage finances.
- 65 percent of business leaders trust a robot more than themselves to execute finance-related tasks; 68 percent trust robots over their own finance teams.
- 78 percent of business leaders believe that robots can improve their work by detecting fraud (28 percent), managing expenses and receipts (21 percent), and approving transactions (19 percent).
- 39 percent of consumers trust a robot more than themselves to manage finances, including a majority of respondents aged 21-35 (52 percent); 49 percent trust robots over personal financial advisors.
- 55 percent of consumers believe robots can help with managing finances by assisting to detect fraud (27 percent), helping to reduce spending (14 percent), and making stock market investments (11 percent).
The role of finance teams and financial advisors will never be the same
To adapt to the growing influence and role of technology, corporate finance professionals and personal finance advisors must embrace change and develop new skills.
- 52 percent of business leaders believe robots will replace corporate finance professionals in the next five years.
- 71 percent of business leaders want help from robots for finance tasks, including automating finance approvals (37 percent), compliance and risk management (35 percent), reporting (31 percent), and budgeting and forecasting (29 percent).
- Business leaders want corporate finance professionals to focus on communicating with customers (45 percent) negotiating discounts 41 precent, and approving transactions (31 percent).
- 33 percent of consumers believe robots will replace personal financial advisors in the next five years.
- 63 percent of consumers want robots to help them manage their finances by freeing up time (31 percent), reducing unnecessary spending (24 percent), and increasing on-time payments (20 percent).
- Consumers want personal financial advisors to provide guidance on major purchasing decisions such as buying a car (52 percent), planning a vacation (51 percent), and buying a house (52 percent).
Our relationship with money has changed, it’s time to embrace AI to manage finance
The events of 2020 have changed the way consumers think about money and have increased the need for organisations to rethink how they use AI and other new technologies to manage financial processes.
- 51 percent of consumers say the pandemic has changed the way they buy goods and services.
- 83 percent of business leaders say organisations that don’t rethink financial processes will face risks, including falling behind competitors (40 percent), inaccurate reporting (35 percent), more stressed workers (33 percent), inadequate decision-making (31 percent).
- 65 percent of consumers say the events of 2020 have changed how they feel about handling cash, with people feeling anxious (27 percent), dirty (20 percent), and fearful (18 percent). More than one-fifth (21 percent) of consumers now say that cash-only is a deal-breaker for doing business.
- Businesses have been quick to respond. 63 percent of business leaders have invested in digital payment capabilities and 53 percent have created new forms of customer engagement or changed their business models in response to COVID-19.