The COVID-19 pandemic has created financial anxiety, sadness, and fear among people and has damaged people’s relationship with money at home and at work, a study shows.

The year 2020 has changed people’s relationship with money, and people now trust robots more than themselves to manage their finances, according to a new study by Oracle and personal finance expert Farnoosh Torabi.

The study of more than 9,000 consumers and business leaders across 14 countries including India found that the COVID-19 pandemic has increased financial anxiety, sadness, and fear among people around the world.

The research also reveals that the pandemic changed who and what we trust to manage our finances, and is reshaping the role and focus areas of corporate finance teams and personal financial advisors.

Among business leaders, financial anxiety and stress increased by 186 percent and sadness grew by 116 percent; consumer financial anxiety and stress doubled and sadness increased by 70 percent, according to the study.

It shows that 90 percent of business leaders are worried about the impact of COVID-19 on their organization, with the most common concerns being a slow economic recovery or recession (51 percent), budget cuts (38 percent), and bankruptcy (27 percent).

For Indian business leaders, 95 percent are worried about the impact of COVID-19, with slow economic recovery or recession (59 percent), budget cuts (49 percent), and bankruptcy (29 percent) as their main concerns.

Around the world, 87 percent of consumers are experiencing financial fears, including job loss (39 percent), losing savings (38 percent), and never getting out of debt (26 percent). Amongst Indian consumers, 90 percent are experiencing financial fears, including job loss (34 percent), losing savings (47 percent), and never getting out of debt (21 percent), it said.

These concerns are keeping people up at night as 41 percent of global consumers reported losing sleep due to their personal finances. In India, that number rose to 59 percent of consumers.

The study says that people want help and now trust robots more than themselves to manage finances. The financial uncertainty created by COVID-19 has changed who and what we trust to manage our finances. To help navigate financial complexity, consumers and business leaders increasingly trust technology over people to help.

Around 67 percent of consumers and business leaders trust a robot more than a human to manage finances, while 83 percent of Indian consumers and business leaders share this belief.

73 percent of business leaders trust a robot more than themselves to manage finances; 77 percent trust robots over their own finance teams. A higher share, 88 percent, of Indian business leaders trust a robot more than themselves to manage finances; 85 percent trust robots over their own finance teams.

The study also said that 89 percent of business leaders believe that robots can improve their work by detecting fraud (34 percent), creating invoices (25 percent), and conducting cost/benefit analysis (23 percent). Almost every Indian business leader (96 percent) believes that robots can improve their work by detecting fraud (37 percent), creating invoices (32 percent), and conducting cost/benefit analysis (30 percent).

According to the study, 53 percent of consumers trust a robot more than themselves to manage finances; 63 percent trust robots over personal financial advisors. The percentage for Indian consumers is 72 percent and 82 percent respectively.

“Robots are well-positioned to assist – they are great with numbers and don’t have the same emotional connection with money. This doesn’t mean finance professionals are going away or being replaced entirely, but the research suggests they should focus on developing additional soft skills as their role evolves,” said Farnoosh Torabi, personal finance expert and host of the So Money podcast.

Meanwhile, 66 percent of consumers believe robots can help with managing finances by assisting to detect fraud (33 percent), helping to reduce spending (22 percent), and making stock market investments (15 percent).

That number amongst Indian consumers is a bit higher, with 85 percent of Indian consumers believing robots can help with managing finances by assisting to detect fraud (45 percent), helping to reduce spending (34 percent), and making stock market investments (24 percent).

“Digital is the new normal and technologies such as artificial intelligence and chatbots play a vital role in managing finance. Our research indicates that consumers trust these technologies to accelerate their financial well-being over personal financial advisors and business leaders see this trend reshaping the role of corporate finance professionals,” said Juergen Lindner, senior vice president, global marketing, Oracle

“Organizations that don’t embrace these changes risk falling behind their peers and competitors; hurting employee productivity, morale and well-being; and struggling to attract the next generation of AI-empowered finance talent,” he added.

(Edited by : Nazim)

First Published:Feb 10, 2021 1:31 PM IST