During the announcement of Google Allo at Google’s I/O conference earlier this year, Google claimed that it's new messaging App will be a step up in terms of privacy and security as it would offer incognito mode, end to end conversation encryption and also storing of messages will only be transient rather than indefinitely.
Just like Hangouts and Gmail, your Allo messages will still be encrypted between the device and Google servers, but it will be stored on servers which uses encryption that leaves the messages accessible to Google’s algorithms.
According to Google, the change was made to improve Allo's smart reply feature, which generates suggested responses to a given conversation. Like most machine learning systems, the smart replies work better with more data. As the Allo team tested those replies, they decided the performance boost from permanently stored messages was worth giving up privacy benefits of transient storage.
So guys when using the Google Allo, just always have it at the back of your mind that you are not guaranteed 100% privacy. If you need a messaging app that's more secured then maybe you should rather stick to WhatsApp.