In the face of rising inflation and stagnant incomes, many Americans are reassessing their financial stability, leading to a significant increase in the search for personal finance guidance. According to a recent report by PYMNTS Intelligence in collaboration with NCR Voyix, nearly two-thirds of consumers are living paycheck to paycheck, with 72% stating that their income has not kept pace with inflation. This economic strain has prompted 57% of Americans to seek financial advice in 2023, marking a notable shift in consumer behavior.
A New Era of Financial Guidance: Diverse Sources and Rising Trust in AI
The quest for financial advice is no longer confined to traditional channels. In this era of digital transformation, individuals are turning to an array of sources, including friends, family, social media, and artificial intelligence (AI) tools. Last year, 47% of those seeking advice leaned on personal networks, with Generation Z and millennials showing higher engagement at 58% and 55%, respectively. Social media platforms have also become a go-to resource for financial insights, consulted by 42% of Americans, although skepticism remains regarding its impact on financial lives. Meanwhile, AI's role in providing financial guidance has grown, with 37% of Americans utilizing these tools, particularly among younger generations like Gen Z, where usage rises to 61%. Despite AI's growing popularity, consumers still favor established channels for major financial decisions.
Traditional financial institutions (FIs) continue to be the most trusted source of financial advice across all generations. Baby boomers place 70% of their trust in banks over personal networks, while even Gen Z shows a slight preference for FIs, trusting banks 72% of the time compared to 71.6% for friends and family. When faced with financial windfalls, 61% of Americans would consult a financial advisor. To meet the accelerating demand, FIs are focusing on offering more personalized financial advice, which has led to significantly higher satisfaction levels. As the market for financial planning expands, FIs that deliver customized solutions are likely to retain and attract more customers.
From a journalist's perspective, this surge in demand for personalized financial advice underscores the importance of trust and expertise in navigating uncertain economic times. The integration of AI-driven tools with traditional financial wisdom offers a promising path forward, helping institutions strengthen client relationships and capture new business opportunities. As consumers increasingly seek guidance, FIs that can provide tailored solutions will be well-positioned to thrive in this evolving landscape.