The Best of The Money Show: Trump-Xi talks, trade tensions and AI’s growing role in managing your money

SPEAKER_1 (0:02)

You're listening to the best of The Money Show.

Stephen Grootes (0:06)

It's a little after 7 o'clock here on The Money Show on this Friday, welcoming you to the best bits of The Money Show. You're listening to a digest of just some of the best interviews from the show this week. If you'd like to hear more, of course, you can go to your favorite website or favorite podcast app and search for The Money Show. Listen, give us a rating, preferably a really good one because we've got some great content for you from the show this week. Now tonight, we bring you a mix of stories from the world of money from the week that was and it was a very, very busy week. Whether you look at the international stories of what happened in New York, that UNGA meeting that happened in New York, the UN General Assembly, but also things happening here locally with the South African Reserve Bank raising rates this week. Then starting with this interview, Stephen Grootes, looking at artificial intelligence, money and the human touch with John Manyike, the head of financial education at Old Mutual, discussing whether artificial intelligence could simplify financial services and make money matters easier for consumers to understand while still preserving the human element in financial decision making. Have a listen.

John Manyike (1:18)

Look, one of the studies that we conduct on an annual basis where we track savings and investment patterns and decisions of consumers is that one of the interesting finding this year in particular, we found that close to about 48 percent of working South Africans actually use AI for financial guidance and hoping it will help them manage their day-to-day finances and advice including retirement planning.

I think there's also a bit of misperception about what AI can do now versus what a human financial advisor can offer. And I think hopefully this conversation can help demystify some of those myths.

Stephen Grootes (2:09)

Okay. Because you can go online, I mean, very simply, and where you used to search, will the spring box, you know, how much will, you know, what time is kickoff tomorrow? You can now get a response if you ask the question, is putting my money into this a good investment? You'll get a cogent response.

John Manyike (2:25)

Yeah.

Stephen Grootes (2:26)

Is that a good thing?

John Manyike (2:27)

That's where the risk comes in. Yeah. Because remember, AI would use some models, they would rely on patterns.

There's so many things that it won't be able to do, and that's what we need to be mindful of. So it will not offer you the empathy and the appreciation of emotions and what informs your risk appetite. But it will just save you based on raw data and say, okay, this is it. It will not be able to keep abreast with the changing landscape from a regulatory framework, text structures. I mean, text tables change every year, thresholds change, but it may not be able to keep up. So the risk there is you can go and make a decision based on a regulatory framework that belongs to another country for that matter because sometimes it cannot make a distinction between certain borders. It depends on how strong it is, but that's where the element of error is there. But the biggest risk for me is the fact that, yes, some of these would tell you, it would state that it does not offer financial advice.

And where the risk comes in is because if there's no accountability for the type of advice you'd get from a machine, you would have no recourse in that sense. But when you have a financial advisor, a human financial advisor, accredited, who have a fiduciary duty to advance your best interest and who are accountable for their conduct and the quality of advice they offer you, AI will not be able to give you that. And then, of course, there's nuances, as I said, including empathy, which it will not be able to. So it's not at the level where it can just simply replace a financial advisor.

Stephen Grootes (4:30)

You used the word advice.

And I wonder if there's a difference between AI, which gives you information, and a human being, which gives you advice. I mean, when I was younger and making financial longer term decisions for the first time, the information is all out there. I mean, you know, there was the Internet age. But talking to usually an older person was a much more rewarding experience.

John Manyike (4:54)

Yeah. No, absolutely. So I think that's where one has to have an eye to know the distinction between what potential you could get from an AI versus what you'd get from an accredited financial advisor. Apart from some of the stuff that I spoke about, it may be useful to ask general questions. For example, what is compound interest? I mean, those are basic financial concepts which at times people might not understand or you just hear a word and you say, oh, you just heard the word probate and you want to understand what does it mean?