How well are investments understood today? If asked, many parents would likely suggest traditional investment options like a fixed deposit or gold. While these have been reliable in the past, they no longer meet the financial needs and aspirations of the current generation.
Data from the Reserve Bank of India (RBI) revealed that, as of December 31, 2020, two-thirds of Indian household financial assets were concentrated in bank deposits, insurance funds, and provident and pension funds. This highlights a lack of awareness around widespread investment opportunities and a significant gap in investment diversification.
This gap in financial advisory services has paved the way for the rise of AI-driven solutions like MyFi. According to Kiran Nambiar, co-founder and CEO of MyFi, India’s rapidly growing investor base, which includes over 100 million unique investors engaged in mutual funds, stocks, and other financial instruments, has highlighted a critical shortage of expert financial advisors.
“India has only about 950 Registered Investment Advisors (RIAs), and even when mutual fund distributors are included, the total remains around 1,20,000 to 1,50,000. This disproportionate ratio of financial advisors to investors necessitates a more scalable solution, and that’s where AI steps in,” Nambiar explained.
MyFi, a SEBI-registered startup, offers an AI-powered personal finance assistant that empowers users to make informed investment decisions. Through its integration with the RBI-approved account aggregator framework, MyFi enables users to log in with their PAN, phone number, and OTP, allowing them to access all their financial accounts seamlessly.
By combining this user data with daily market insights on mutual funds, stocks, and other financial instruments, MyFi delivers personalised recommendations and discovery features. This democratisation of financial planning ensures that even retail investors can make data-driven investment choices without relying on traditional financial advisors.
AI in Trading
AI isn’t just transforming personal finance, it’s reshaping the trading landscape as well. Noida-based uTrade Solutions is leading this revolution with its algorithmic trading platform. Specialising in trading solutions for stock brokers, fund managers, and retail investors, uTrade offers advanced automation tools that simplify trading strategies.
The company’s no-code algorithmic trading platform allows investors, both experienced and beginners, to plan, strategise, and automate their trades with minimal effort.
Key features of the platform include pre-made strategy templates, which offer hundreds of pre-built strategies for various asset classes, making trading accessible and efficient. uTrade Originals provides a marketplace for AI-driven trading algorithms developed by industry experts, enabling one-click deployment.
Seamless integration with insurance firm Share India allows traders to connect their Share India account instantly for a streamlined trading experience. Moreover, real-time AI-powered dashboards provide a comprehensive overview of portfolios, keeping traders ahead of market trends.
AI in Tax and Accounting
Despite AI’s growing influence, many traditional tax and accounting firms have been slow to adopt AI-driven solutions. According to a Thomson Reuters Institute’s report titled ‘2024 generative AI in professional services’, 30% of tax and accounting firms are still evaluating AI adoption. In contrast, 49% have no immediate plans to integrate AI into their workflows.
However, leading firms like Ernst & Young (EY), KPMG, and Deloitte have already embraced AI-powered automation. EY’s AI audit tools automate contract and document analysis with precision, drastically reducing manual effort. KPMG Ignite, an AI platform, enhances data-driven insights, offering predictive analytics and strategic financial guidance. Deloitte’s AI innovations streamline financial management with automation, minimising human errors and increasing efficiency.
Closer to India, Chennai-based startup Fhero Accounting Solutions is disrupting the industry by integrating AI into tax and accounting workflows. Fhero automates repetitive tasks such as data entry automation, capturing and categorising financial transactions from invoices, receipts, and bank statements with minimal manual input.
AI-driven analytics generate financial insights to assist clients in proactive decision-making. Furthermore, AI ensures error reduction, improving accuracy in record-keeping and compliance.
What’s Next?
Today, how most people embrace LLMs and generative AI is still user-initiated to a large extent. The user asks a question, and it provides more information in response. It’s always the user taking the first step to engage.
Imagine a real-world scenario where a financial advisor isn’t simply reactive, waiting for clients to ask for advice. Instead, they proactively offer guided advice based on financial and life circumstances. Whether it’s about marriage, having a child, starting a new job, or facing financial uncertainty, the advisor would take the customers’ unique circumstances into consideration.
“With AI today, we can automate a significant part of that process. While I’m not suggesting that recommendations should be entirely automated, AI can now understand a person’s financial landscape and deliver a highly personalised experience at scale. Right now, this level of service is typically reserved for high-net-worth individuals (HNIs) and ultra-HNIs with dedicated relationship managers. But why shouldn’t it be available to everyone? The technology exists, we just need to build it,” Nambiar added.
Maybe the only thing holding the industry back is the imagination in designing these experiences and the time required to develop them.
