THE ROLE OF AI-POWERED PERSONAL FINANCE APPLICATIONS IN SHAPING SAVING AND INVESTMENT BEHAVIOR OF YOUNG CONSUMERS

Abstract

With the rise of Artificial Intelligence (AI) in financial technology, personal finance applications have gained popularity among young consumers. These apps offer AI-driven features such as automated savings, expense tracking, investment recommendations, and credit score monitoring. This study explores how AI-powered personal finance apps influence the saving and investment behavior of consumers aged 18–35. Through a mixed-method approach involving a survey of 250 young users and interviews with 20 financial advisors, the study finds that AI-driven recommendations enhance financial awareness, promote disciplined savings, and encourage small-scale investments. However, issues of trust, data privacy, and over-reliance on automation remain challenges. The paper concludes that AI-based personal finance tools can significantly shape financial behavior if integrated with financial literacy initiatives. The increasing integration of Artificial Intelligence (AI) in financial technology has revolutionized the way individuals, particularly young consumers, manage their personal finances. AI-powered personal finance applications, such as INDmoney, Fi, Jupiter, and Mint, are gaining prominence due to their ability to provide automated savings, real-time expense tracking, personalized investment recommendations, and financial planning insights. These platforms employ machine learning algorithms to analyze user behavior, categorize spending, and suggest tailored financial strategies. This research paper investigates the influence of AI-powered personal finance applications on the saving and investment behavior of young consumers, aged 18–35, with a focus on the Indian urban market. The study adopts a mixed-method research design, combining quantitative surveys of 250 respondents and qualitative interviews with 20 financial advisors. The findings reveal that AI-driven personal finance applications contribute significantly to improving financial awareness and encouraging disciplined saving habits among young users. Nearly two-thirds of respondents reported an increase in their monthly savings after adopting such applications, while over half of them initiated investments—such as Systematic Investment Plans (SIPs), mutual funds, and stocks—guided by AI-generated recommendations. Additionally, the results highlight that these applications foster a shift from impulsive spending towards more goal-oriented financial behavior. The study concludes that AI-powered personal finance applications have the potential to reshape consumer financial behavior by promoting savings discipline and democratizing access to investment opportunities. However, their impact will be maximized only when coupled with trust-building measures, enhanced user education, and regulatory frameworks ensuring transparency and data security. This research contributes to the emerging discourse on the intersection of AI, commerce, and consumer behavior, offering valuable insights for fintech developers, policymakers, and educators.