Here's How SoFi Is Using Artificial Intelligence (AI) and Why It Matters. Hint: It Could Be a Game-Changer.

With artificial intelligence (AI) offering high value in many different ways today, it was only a matter of time before it could help you manage your finances better. SoFi Technologies (NASDAQ: SOFI) is offering one of the first AI programs that syncs with your personal accounts through the SoFi app and offers targeted advice based on your individual financial standing.

Here's how SoFi's new product, SoFi Coach, works, and why it could be a game changer for the online bank.

How SoFi is trying to reinvent banking

SoFi isn't dramatically different from any other U.S. bank, aside from not having any physical branches, and it's not the only all-digital bank, either. But it's building its brand by offering a large array of services and focusing on innovation. Most of its recent launches focus on blockchain technology, which it's using to lower costs and increase speed related to financial management. Some examples are international money transfers and its just-introduced stablecoin.

Image source: SoFi.

Another way SoFi distinguishes itself is by offering access to some initial public offerings (IPO) directly. Anyone who has a SoFi investing account can submit an indication of interest (IOI) for any IPO listed in its IPO Investing Center, and as of June 4, that includes SpaceX. It's similar to a buy order for a current stock, but there's no guarantee the order will go through.

SpaceX has an ambitious IPO and has committed to allocating a higher percentage of shares to retail investors than the typical IPO. It needs to sell all that to reach the $75 billion it's looking to raise, making it more likely that retail investors will get the shares they want.

AI, IPOs, and more

SoFi is now rolling out SoFi Coach, which has been in pilot testing as an AI-powered financial coach. It's available to SoFi account holders and connects with 12,000 financial institutions to get a complete picture of a user's finances, and it can analyze behavior and make suggestions. For example, it can track spending and help you budget, spot accounts that offer higher yields, and recommend debt-repayment plans. It can also go deeper and offer realistic paths to homeownership, or help you weigh decisions like whether it makes sense to pay off more credit card debt or more of your mortgage.

In tests, almost 70% of users took action to improve their finances based on the Coach's recommendations. It offers real value for its members, who are often young and just starting out. This population is attracted to SoFi's ease of use, and AI tools are another way it resonates with this digital-savvy crowd. The tools improve through machine learning, and SoFi is planning to offer new agentic AI features through the coach.

SoFi is already onboarding new members at record levels -- 1.1 million in the first quarter, and the rate of cross-sell is increasing. SoFi's strategy is to grow with its young members, and offering data-heavy recommendations can lead to higher new-product adoption rates, plus bring in new members. Management is laying the groundwork for long-term success, and AI could be a game changer for SoFi to become a major destination for new members.

Jennifer Saibil has positions in SoFi Technologies. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.