Online exclusive
It’s the summer of 2029 and Sarah, a 32-year-old Auckland-based freelance graphic designer, wakes one morning to an alert buzzing on her smartwatch.
Her AI financial assistant, FinAI, has some good news.
“Good morning, Sarah. Your investment portfolio has outperformed the market by 3.2% this quarter,” FinAI’s alert reads. “I’ve identified an opportunity to rebalance for optimal returns. Shall I proceed?”
Sarah taps “yes” on her watch and FinAI executes a series of trades across global stock markets, adjusting her portfolio in milliseconds based on real-time market data and predictive algorithms.
At lunchtime, while she’s eating a tuna melt, FinAI is in touch again.
“Based on your increased freelance income and current market conditions, I recommend refinancing your mortgage,” FinAI advises. “This could save you $15,000 over the next five years. Would you like me to initiate the process with our partnered robo-lender?”
Sarah taps “yes” and FinAI begins the refinancing process, using blockchain-based smart contracts to handle the paperwork and negotiations securely. Later, as Sarah leaves the gym for home, there’s yet another buzz on her wrist. The quote from the auto repair shop has come through.
Sarah’s electric vehicle needs its regenerative braking system repaired at a cost of $2200. FinAI pops up again, asking for permission to adjust her budget, reallocating funds from her discretionary spending category to cover the cost without affecting her long-term financial goals.
“Yes,” Sarah taps as she walks home on a balmy Auckland evening.
From education to action
Welcome to the future of managing your finances, where AI, automation and blockchain technologies work in the background to take the hassle out of it.
New Zealand has a thriving fintech sector, which last year grew 16% to generate $2.9 billion in revenue, according to the Technology Investment Network. Around 60% of that sum was generated by one company, ASX-listed accounting software maker Xero, which recently launched JAX (Just Ask Xero), its AI assistant for small business owners trying to keep on top of their books.
But AI-powered fintech services are in their nascent phase here. Critics see the dominance of the four major Australian-owned banks in our market as a drag on innovation. But that is set to change. Legislation to enable open banking is in the works, which will require the big four to share customers’ financial data with trusted third parties.
The Financial Markets Authority is also establishing a regulatory sandbox this year, allowing fintech companies to safely pilot new AI and blockchain-based financial services without fear of running into legal hot water.
A major shift will come with the rise of AI agents, which are programmed to make decisions and carry out actions on your behalf. That will move beyond providing education and algorithm-based suggestions to carrying through on financial decisions on your behalf.
Here’s a snapshot of some of the services already available to Kiwis, and others likely to become part of the financial landscape within a few years:
Robo advisors and digital advice platforms
Several companies have launched digital advice tools to help New Zealanders manage their investments, particularly for KiwiSaver.
Kōura Wealth was an early entrant, offering a digital tool in 2019 that focuses on ensuring New Zealanders save adequately for retirement. It offers personalised portfolio recommendations and allows users to adjust their portfolio allocations.
In 2021, Milford Asset Management introduced a tool that considers individual risk profiles before determining an investor type. GoalsGetter, from fund manager Nikko Asset Management, offers survey tools to determine your investment goals, then uses algorithms to determine the outcomes based on the lump sum you are investing, additional monthly contributions, and your appetite for risk.
“As a financial model, it cannot predict the future, but it does aim to provide a guide as to the possible outcomes of your investments,” Nikko AM points out.
The whole process is automated, with GoalsGetter suggesting appropriate funds to invest in based on your answers.
Mobile investment apps
The “Sharesies effect” has revolutionised investing in New Zealand since the app was launched in 2017. Sharesies allows investments in New Zealand, Australian and US shares and listed funds starting from as little as 1 cent, making investing accessible to a wider audience.
Hatch and Stake also offer access to US shares and exchange-traded funds (ETFs) with low minimum investments. InvestNow specialises in KiwiSaver, ETFs and managed funds.
Sharesies is gearing up to become a fully fledged financial provider, offering savings accounts, KiwiSaver and insurance services, with a credit card service coming soon through a tie-up with MasterCard. Last year, it debuted an AI-powered service which helps you research potential investments. For instance, if you are interested in EV battery technology, the AI assistant will give you an overview of the sector and list companies and funds with a focus on EVs.
AI behind the scenes
Financial sector players are integrating AI across the board. It may not appear as a cutesy assistant who will attempt to answer your questions but plays a fundamental role in everything from fund management decisions to customer services.
AI tools can analyse historical data and current market trends to predict the best ways to allocate assets, maximising returns and minimising risks. AI can help rebalance portfolios more efficiently and accurately based on real-time market data. AI moves faster than humans and often with greater precision. AI-driven systems can automatically flag potential regulatory violations, ensure adherence to know-your-customer (KYC) requirements, and generate compliance reports.
Local fintech company Debut aims to launch this year as a virtual bank with its infrastructure relying to an extensive degree on AI systems.
Fintech trust
Our finances rank up there with health records as the most sensitive information that companies hold on us, so increasing the use of AI, automation and blockchain tech requires watertight security, and data privacy to win buy-in from consumers. Robo-advice that sends you down the wrong financial path will likewise prove a massive turn-off. Technology is giving us more options to manage our finances, but FinAI has some work to do building trust before we are all tapping “yes” to approve its recommendations.
