Utilizing Generative AI for Financial Literacy

Abstract

This article examines the potential of generative artificial intelligence systems to address declining financial literacy rates in an increasingly complex economic landscape. By analyzing both theoretical foundations and practical applications, we explore how AI-powered solutions can provide personalized financial guidance, education, and behavioral nudging that adapts to individual circumstances and knowledge levels. The article investigates generative AI's capabilities for creating customized budgeting frameworks, explaining investment concepts, monitoring financial health, and delivering tailored educational content—all at scale and with accessibility not possible through traditional approaches. While highlighting these promising applications, we also critically assess important limitations including accuracy concerns, dependency on user query skills, interpretation challenges, privacy considerations, and ethical implications of automated financial advice. Through a proposed empirical research framework and implementation strategy, we outline pathways for effective integration with existing financial services while considering diverse user needs. This examination ultimately suggests that generative AI, when thoughtfully implemented with appropriate guardrails, holds significant promise for democratizing access to high-quality financial guidance while potentially reducing financial distress and enhancing economic resilience across diverse populations.