A few weeks ago, I got an email from my bank.

"We noticed unusual activity on your card. Please verify these transactions."

It was 11 p.m. I was tired. I scrolled through the list—one charge looked off, but I couldn’t be sure. So, I checked my statements, Googled the merchant name, and debated calling customer service. Was it fraud? Or did I just forget something I bought?

Fifteen minutes later, I gave up. I’d deal with it tomorrow.

Here’s the thing: this is a problem AI should already be solving. Instead of making me do all the work, what if my bank’s AI could just say:

"This transaction is from the coffee shop you visited last Tuesday. Here’s your receipt. Do you recognize it?"

Or better yet—if it was fraud, what if AI could dispute the charge, issue a temporary refund, and only notify me if something truly needed my attention?

That’s where AI in finance is heading. Not just answering questions, but making smart decisions on our behalf. But how far are we from that reality?

The 5 stages of AI in finance

We tend to think of AI as either basic chatbots or fully autonomous systems. But the truth is, AI is evolving step by step, much like self-driving cars.

Right now, most AI in finance is Level 1: Conversational—helpful, but mostly reactive. The future? AI will be an active financial assistant, a decision-maker, and eventually, an autonomous system.

Here’s what that journey looks like.

Level 1: Conversational AI (Where we are now)

This is the AI assistant phase—helpful, but still passive.

• You ask, it answers. Think of your bank's chatbot or customer support AI.

• AI can summarize transactions, flag potential fraud, or help with budgeting.

Example: You ask your AI assistant, “What’s my balance?” It tells you. But if you’re overspending, it won’t warn you unless you ask.

The Problem: It’s still reactive. AI isn’t solving problems yet—it’s just replacing FAQs with fancier responses.

Level 2: Reasoning AI (Emerging now)

AI is getting smarter about context. It can analyze patterns, flag risks, and suggest next steps.

• Detects spending habits: “Hey, you’ve been charged twice for this—want me to dispute it?”

• Helps with financial decisions: “If you pay your credit card bill today instead of next week, you’ll avoid $25 in interest.”

Example: AI sees you’re paying for two overlapping subscriptions and asks if you’d like to cancel one.

The Challenge: AI is still reactive, not proactive. It can make recommendations, but it’s not taking action for you yet.

Level 3: Autonomous agents (The next big shift)

This is where AI starts making financial moves for you. It doesn’t just suggest—it acts.

• Auto-optimizing payments: AI sees your electric bill is due and pays it at the best time for cash flow.

• Smart investing: AI shifts extra cash into high-yield savings or auto-adjusts investments based on market trends.

• Fraud handling: AI freezes your card for suspicious transactions and reissues a new one automatically.

Example: You book a trip to Europe. Your AI assistant converts money at the best exchange rate before you even think about it.

The Risk: If AI makes the wrong call, how do we undo it? There must be human overrides and safety nets.

Level 4: AI as a financial innovator

At this stage, AI isn’t just executing tasks—it’s designing new financial systems.

• AI-driven lending: Instead of rigid credit scores, AI evaluates financial health in real-time to approve loans.

• Smart insurance: AI dynamically adjusts your premiums based on your actual behavior—like usage-based car insurance that lowers your rate if you drive safely.

Example: Instead of a one-size-fits-all mortgage, AI creates a repayment plan that adapts based on your income and spending habits.

The Risk: AI-generated financial models could be too complex for humans to regulate. Transparency and accountability become huge concerns.

Level 5: AI-first financial organizations

This is the "sci-fi" phase—but we’re closer than we think.

• DAOs (Decentralized AI Organizations) managing investment funds.

• AI-powered economies where transactions, lending, and governance are entirely automated.

Example: Imagine a financial system where loans, payments, and investments happen automatically, no banks needed.

The Big Question: How do we ensure AI financial systems act in our best interest—not just to maximize profits?

What this means for you (Even if you’re not in fintech)

AI in finance isn’t just about banks and fintech startups. It’s about your day-to-day life.

• Saving time – No more manually tracking bills, investments, or budgeting. AI does it for you.

• Better financial decisions – AI optimizes your money without you needing to think about it.

• More accessible finance – AI can create better credit, smarter loans, and fairer financial systems for everyone.

But let’s be real—this shift isn’t without risks. AI making bad financial decisions could be costly.

If AI is running the system, who holds it accountable?

Not everyone will understand how AI-driven finance works, which could lead to new financial inequalities.

So while I’m excited about where we’re headed, I think we should ask: How do we build AI in a way that serves us—not just the companies deploying it?

Because at the end of the day, AI should make finance simpler, fairer, and more human—not less.

And if it can save me from those late-night fraud alerts? Even better.

Closing thoughts

We’re moving fast from chatbots (Level 1) to decision-making AI (Level 3), and Level 4+ isn’t far behind.

If you’re building in this space, here’s my advice:

• Keep humans in the loop. Don’t automate away control too quickly.

• Design for transparency. If AI makes decisions about money, we need to understand why.

• Think long-term. Finance isn’t just transactions—it’s people’s lives. AI should work for us, not the other way around.

The future is coming fast. Let’s make sure we get it right.