Today's Edition
SARA ALZAABI (ABU DHABI)
As money becomes invisible and decisions automated, financial literacy is shifting toward human judgement.
Aletihad spoke to AI and financial experts on how a cashless, AI-driven economy is reshaping behaviour, especially among younger generations.
Vasudha Khandeparkar, AI and Data Expert, explains that financial literacy today is not only more important, but also more fragile.
“It becomes critical because it is fragile,” she said, noting that the disappearance of physical money has weakened people’s connection to spending. In a system where payments are invisible and automated, “automation removes visibility. Convenience removes reflection,” allowing habits to form without conscious awareness.
As a result, financial understanding must evolve beyond traditional concepts.
It is no longer about counting money, but about understanding systems, including “how interest works, how risk accumulates, and how behavioural nudges are used to influence spending”.
For Khandeparkar, the literacy of the future lies in recognising these invisible forces. As artificial intelligence becomes more integrated into personal finance, she stressed the importance of maintaining human judgement.
“AI can assist thinking, the child needs to be taught that they are the human in the loop,” she said, warning that the real risk is not using AI, but assuming its recommendations are complete or neutral.
She added: “Outsourcing execution is fine. Outsourcing thinking is not,” highlighting the need to build critical thinking habits early.
A similar concern is echoed by Anselm Mendes, Executive Director at the Continental Group, who points out that the modern financial system is designed to encourage spending.
“The cashless economy is optimised around behavioural nudges and the removal of friction,” he explained, describing how easy credit, personalised offers, and seamless transactions make spending effortless while reducing reflection.
In this context, he noted that “automation handles the transactions but the thinking still has to be ours,” reinforcing the need for individuals to remain actively engaged in their financial decisions.
Mendes also highlights that AI is increasingly being used as a support tool, but should not replace human reasoning.
“AI does not give us a free pass to stop thinking,” he said, adding that while people are using AI to research and validate decisions, they must still take ownership of the final choice.
This shift, he explained, marks the rise of a more personalised financial landscape, where decisions must reflect individual goals, risk appetite, and circumstances.
From a regional perspective, Neeraj Gupta, CEO of Policybazaar.ae, reinforces that financial literacy is becoming both more critical and more fragile, particularly in highly digital markets like the UAE.
He noted that with over 90% of transactions now digital in urban centres, “the visibility of money has reduced”, leading to weaker spending discipline.
What is emerging, he explained, is not reckless behaviour, but passive consumption shaped by “subscriptions, one-click checkouts, auto-debits”. As a result, financial literacy must shift from understanding how to spend to understanding how to remain aware in an invisible system.
Gupta also stresses the importance of questioning AI-driven recommendations.
“AI should assist decisions, not make them,” he said, emphasising the need to pause and ask why a recommendation is being made before acting on it. This, he explained, is particularly important for younger users who may default to algorithmic suggestions without fully understanding them.
Across all three experts, there is strong agreement on the growing opportunity for education systems to evolve alongside these changes.
Khandeparkar noted that applied decision-making in an AI-driven environment is still evolving, while Mendes observed that “formal education systems have not changed much when it comes to financial literacy”. Gupta added that most systems still focus on theory rather than behaviour.
They collectively argue for a more practical and experiential approach to financial education.
Students need to understand how algorithms influence credit access, how digital footprints affect opportunities, as well as how behavioural design shapes spending habits. Without this shift, financial literacy risks remaining disconnected from real-world realities.
Another shared concern is the rise of data-driven systems and the growing risk of inequality. Khandeparkar highlighted the imbalance in visibility, where “some individuals are richly represented in data systems, others are nearly invisible”.
Mendes reinforces this by stating that “data inequality is already here”, warning that algorithms can amplify existing disparities. Gupta added that individuals with limited or inconsistent data histories may be disadvantaged.
In this evolving environment, the role of parents is becoming increasingly important.
Khandeparkar explained that “parents need to move from teaching transactions to teaching judgement,” especially in a world where children may never handle physical money. Mendes agreed, noting that learning happens through practice and real-life exposure, while Gupta suggested using digital tools such as controlled wallets and spending limits to make financial decisions visible and understandable.
Across all perspectives, the emphasis is on building habits through repeated exposure rather than one-time instruction. Ultimately, all three experts converge on a single defining skill for the future. In an increasingly automated financial world, human judgment remains essential.
Khandeparkar stated that “critical thinking is always going to be paramount”, while Mendes emphasisesd long-term thinking and structured decision-making. Gupta reinforces this by highlighting independent judgment as the most important skill, noting that resilience will belong to those who can pause, question, and decide for themselves.
As Khandeparkar concluded: “the future of finance will be automated. The future of financial resilience will still be human”.
