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While navigating this increasingly connected world, you leave a trail of data about where you go, what you buy, and who you interact with. If you use a smartphone, this trail intensifies with every tweet and Foursquare check-in.

This may alarm some people, but Omar Green sees it as key to a smarter way to manage finances than a spreadsheet or piece of paper.

Green is founder and CEO of personal finance startup wallet.AI, which is among a growing number of app makers incorporating so-called contextual awareness into their software. The company is building software that includes a mobile app to sort through your data trail and, combined with insights about your spending habits, offer up timely financial advice. It might range from warning you not to spend more than $20 a day if you want to make rent at the end of the month to, perhaps, nudging you during a daily Starbucks run to get a drip coffee rather than your usual vanilla latte.

Green, who previously worked as director of strategic mobile initiatives for financial software company Intuit and built contextually aware phone software at a previous startup, likens the approach to the quantitative trading methods used by many financial firms; these methods incorporate lots of data to help traders make rational, nonemotional decisions.

“That was one of the ‘ahas’ I had,” Green says. “Let’s think about what it means to build a machine that can do some of this for me.”

With a user’s permission, wallet.AI will gather many kinds of information from the handset’s built-in sensors, and the social networks and financial transactions a user lets it access. Wallet.AI would analyze this data remotely, and distill it into tips it can serve up at specific times and places.

The San Francisco-based company is still keeping many details under wraps, but says it hopes to have a product out in about a year. Green expects this will be sold to financial institutions who can offer it to their clients and, perhaps, to consumers via app stores.

For now, wallet.AI is focused on building a prototype, which it is testing with a small group of customers. Eventually, he expects to have cloud software chomping on data sets built up by users, determining different insights about their finances. “Anything we can use to help you make better decisions,” Green says.

If wallet.AI can help, he figures, consumers will be willing to let wallet.AI track sensitive personal information and glean ambient data from the world around them, and pay for it. The company is likely to face skepticism from some potential customers, though, who are wary of sharing data with yet another service, even if it can mean saving some cash.

So says Rick Oglesby, a payments analyst with Aite Group. He could see wallet.AI appealing to financial institutions, such as banks, who may be interested in offering it to their customers in the hopes that it will help them stand out from the competition. Even if banks feel comfortable with it, though, it’s not yet known if consumers will want it. “Some people just want to shop and not think about money, but some people want to think about money all the time,” he says.

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Tagged: Computing, Business, Web, Apple, mobile, smartphone, Android, app, personal finance

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