Hey Siri, I Need a Loan

or: the Role of Central Banks in Financial Literacy

Marko Skreb,
January 2017

Me: “Hey Siri, I need a loan.”

My iPhone: “How does XXX (the actual name of a bank) sound like? I can give you directions,” replies Siri and a map pops up on my screen with directions how to get to the bank. This is the actual conversation I had with my iPhone when writing this text. For those unfamiliar with it, Siri is a voice-controlled, intelligent virtual assistant created by Apple.

However, with artificial intelligence (AI) developing exponentially this conversation might soon look something like this:

Me: “Hi Alexa, I need a new car. Which loan is best for me?”
Alexa: “Do not worry about a loan, I will find optimal financing for your car. Just pick the model you like and we will deliver it to your door tomorrow”.

Alexa is Amazon’s intelligent voice assistant, which is developing very rapidly. A company like Amazon might combine all the required transactions: finance the purchase of a new car (optimizing the loan according to my income and assets) and deliver it without me leaving my home. Without even applying for a loan at a bank or going to a car dealer to get a car. I could have this conversation with Alexa (and buy a new car) while sipping coffee in my kitchen as Alexa will be integrated in my refrigerator.

So the question is whether we need to increase financial literacy when machines (AI) will soon be helping us make the best financial decisions for ourselves? My answer is yes, we do need to focus on financial literacy in spite of all the technological advances in finance, and in this note I will try to explain why.

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