Good morning. It's Sunday, May. 5 and we're covering financial services' deliberate approach to AI, social media money advice, why one region of America has over HALF of the housing inventory, and much more. | First time reading? Sign up here. | Stock Market Update | | | | | Market Performance: May 3, 2024.
Asian shares were mostly higher Friday ahead of a report on the U.S. jobs market, while several major markets including Tokyo and Shanghai were closed for holidays. Oil prices and U.S. futures were higher. The Japanese yen strengthened slightly against the U.S. dollar amid signs of heavy central bank intervention to tamp down the U.S. dollar's advance.
The financial newspaper Nihon Keizai Shimbun reported that estimates showed the Bank of Japan spending an estimated 8 trillion yen (about $50 billion) this week in trying to keep the yen from slipping further against the dollar. |
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| | Financial Maverick Insights | | | | | Financial services' deliberate approach to AI | Financial service companies have been using artificial intelligence in various forms for decades. So it's not surprising that employees and executives alike are showing early interest in generative AI-based tools such as ChatGPT.
What is surprising, industry executives said at the 2024 MIT FinTech conference, is the rapid pace of adoption in the financial sector, where generative AI is proving valuable for a wide variety of employees, not just data scientists.
"AI is basically top of mind for everybody. It's been a few months of transition and very rapid acceleration," said Jose Lobez, PhD '12, vice president of global AI and data innovation at Visa.
The panel was moderated by Jonathan Ruane, MBA '16, a research scientist at the MIT Initiative on the Digital Economy.
AI is assisting financial workers
As in other industries, in financial services AI is largely augmenting the tasks performed by employees rather than replacing human workers. Early use cases include back-office automation, data aggregation and visualization, and fraud prevention.
Another reason is the current state of AI. "Even if companies wanted to be able to reduce head count, I don't think the technology is 100% there yet," he said. "I always tell the team, 'We don't need to solve everything with AI, because we probably can't.' Sometimes you just can solve things with a really simple model."
Regulatory concerns stall some uses
The financial industry has been slow to put AI in front of customers. Lobez and Tewary said that financial service firms are experimenting with products such as AI-enabled chat agents, but this work is happening slowly.
Customer-facing applications require much more effort than internal use cases, in part because they're subject to far more regulatory scrutiny, Tewary said. AI models must be more explainable (showing how a system came to a decision) and traceable (showing what data, processes, and artifacts went into the system). Additionally, outputs must be validated to avoid hallucinations, or inaccurate answers based on fabricated data.
AI will become the operating system of work
Ruane said that the state of AI adoption in financial services is consistent with many previous types of general-purpose technology. What begins as a point solution addressing individual tasks continues as a wave of process innovations capable of reimagining entire industries — much like manufacturing transformed when electricity came to factories.
Inertia and resource allocation can slow things down in the enterprise setting, and startups bring unique skills and flexibility to the table, Tewary said. That said, companies like PayPal look for mature startups with a proven value proposition. |
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| | | | | | Social Media Money Advice: Avoiding the Bad, Finding the Good | Social media, which popularized concepts such as loud budgeting and cash stuffing, can be a great place to get new ideas about how to manage your money. But endless scrolling can also lead to envy, romanticizing unattainable goals and exposure to faulty advice.
"Lots of bad information is delivered over social media that's just inaccurate," says Kristy Archuleta, professor of financial planning, housing and consumer economics at the University of Georgia. "It's hard for someone who may not have had a lot of life experience or financial knowledge to be able to navigate what's accurate and what's not."
To find helpful money tips on social media while leaving the harmful ones behind, financial experts recommend taking these steps.
Recognize the limits of what you see online
Whatever you see online is probably not a complete picture of the other person's life, says Malcolm Ethridge, a certified financial planner and host of "The Tech Money Podcast." Someone might post a photo of them posing with a boat or fancy car, which could make you feel like you should own those luxury items, too, Ethridge says. But in reality, the person posting those images might not own them, either. "Social media induces conspicuous consumption that happens unnecessarily," he says.
Double-check advice and credentials
When you hear specific financial advice on social media, financial therapist and accredited financial counselor Rahkim Sabree suggests first checking the credentials of the advice-giver. "A lot of influencers provide information that is very subjective," he says, and their advice may apply only to a subset of people, such as those with no debt or those who have significant investments.
Seek out new perspectives
One of the benefits of learning about money on social media is that you can find viewpoints you wouldn't normally discover in person, says Kyla Scanlon, financial influencer and author of the forthcoming book "In This Economy? How Money & Markets Really Work." "You can be scrolling along and then you might see a video that changes how you think about budget planning, or the economy or investing," Scanlon says. "You hear voices that might not have gotten a platform previously and from all sorts of backgrounds and experiences."
Block negativity
Since negative posts tend to get more attention online, it's easy to get sucked into a spiral of stress and worry when scrolling through social media, Sabree says. He recommends avoiding posts that make you feel bad about your own choices. In the personal finance world, he says, many popular influencers rely on shame and guilt to get attention, but you might not find that helpful.
Take social media breaks
When Scanlon notices her stress levels rising after spending a lot of time on social media, she gives herself a mental break. "I try to remember it's not real," she says. |
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| | Alternative Investing |  | Where can you securely store your cryptocurrency? | TheStreet CEO Sara Silverstein and Roundtable's Rob Nelson discuss the challenges of cryptocurrency storage. |
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|  | Could Elon Musk's Release of the Chatbot Code Help You Make Money With AI? | The ethics of AI have been increasingly debated as the technology has gotten more advanced. In order for regular consumers and other individuals to understand the extent of AI, there has been an ongoing question about whether or not these companies should reveal how their AI works to the public. |
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| | Do you think Elon Musk's release of the chatbot code could help make you money with AI? | | | Reach Over 100,000 Financial Mavericks | Advertise with Financial Maverick to get your brand in front of the Financial Gurus in the world. The Mavericks are high-income and highly knowledge people who are always looking for an interesting product or tool. | | | Share Financial Maverick | Calling all Financial Mavericks! To help out a family and friend in need by sharing this newsletter. Tell you what if you ever wanted to be a Hero, Financial Guru, or a Nice Person this is your time! | | | DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research. | |
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