Gen Z and Millennials Embrace AI for Personal Finance: Opportunities and Challenges

As technology continues to shape our lives, younger generations are increasingly turning to artificial intelligence (AI) for personal finance advice. A recent report by BMO Financial found that 61% of Generation Z respondents use AI to manage their finances, indicating a growing trend among young investors. This shift raises both opportunities and challenges for traditional financial institutions and advisors.

AI-driven personal finance tools offer convenience, accessibility, and 24/7 guidance, making them appealing to tech-savvy Gen Z and millennials. These tools can help users create budgets, identify investment strategies, and build savings, all while learning more about personal finance. Moreover, AI can provide personalized financial plans tailored to individual needs and goals, democratizing access to financial advice.

However, the reliance on AI for financial decision-making also presents risks and challenges. A PYMNTS Intelligence report highlights that 79% of millennials and Gen Z turn to social media for financial advice, with algorithms steering them towards curated narratives. This can lead to the propagation of financial myths and scams, as 34% of Gen Z reports being influenced by finfluencers. To mitigate these risks, traditional financial institutions must focus on transparency, accuracy, and personalized experiences to combat misinformation and promote financial literacy.


As AI continues to evolve, it is essential to consider the role of human interaction and emotional intelligence in financial decision-making. AI algorithms, while efficient and data-driven, lack human touch and may struggle to account for individual emotions, such as fear or greed, which can significantly influence financial decisions. Therefore, while AI can provide valuable insights, it should complement, not replace, human financial advice.

To address the growing preference for AI-driven financial advice among Gen Z and millennials, traditional financial institutions must adapt their services and business models. By leveraging partnerships with FinTech companies, they can offer personalized financial experiences, moving away from one-size-fits-all solutions. This shift is reflected in the increasing number of U.S. retail banking consumers (53%) seeking financial guidance from their banks.


In conclusion, the shift towards AI-driven financial advice among Gen Z and millennials presents both opportunities and challenges. While AI offers convenience and accessibility, it also raises concerns about misinformation and the role of human interaction in financial decision-making. Traditional financial institutions must adapt to this changing landscape by embracing AI, promoting transparency, and offering personalized, accurate financial guidance. By doing so, they can maintain relevance and trust in a market increasingly influenced by social media and regulatory needs.

As an investment-focused author, it is crucial to emphasize the importance of stable, income-generating investments over speculative ventures like AI. Dividend stocks, such as those in the utilities, renewable energy, and REIT sectors, offer consistent, inflation-protected income, making them particularly suitable for retirement portfolios. Investors should capitalize on undervaluations created by market perceptions, such as high interest rates affecting REITs, and consider investments in funds like the Cohen & Steers Quality Income Realty Fund (RQI) for their stable yields and potential for capital gains. Diversification and adaptability are key to a successful investment strategy, as seen in the interest in the XAI Octagon Floating Rate & Alternative Income Trust (XFLT) and REITs like AWP and GOOD. Reliable income-generating investments, such as Scotiabank, offer high dividends and are supported by strong institutional stability. Ultimately, a long-term, stable income approach that leverages diversification and market opportunities is the best strategy for securing steady returns.