Artificial intelligence not trusted for financial advice

A robot inspecting coins
Humans still don't trust artificial intelligence alone when it comes to their wealth

We trust Siri to give us directions, are happy to use a self-checkout at the supermarket, and the introduction of driverless cars is eagerly awaited by many, yet it seems bank customers are not ready to accept investment advice from artificial intelligence bots.

Banks have been investing heavily in the use of artificial intelligence (AI) and automation, with virtual bots frequently replacing human service staff in customer-controlled self-service.

This has led to the growth of robo-advisers, which are digital platforms that provide automated, algorithm-driven financial advice with little or no human supervision. In the US alone, it is projected robo-advisers will soon be managing over $1 trillion of Americans’ wealth.

A study by Griffith University researchers, titled Man vs Machine, has assessed the faith customers had in computer-generated investment advice, and found that while things like opening an account and depositing smaller amounts (up to around $1,000) were seen as acceptable, when the amount increases customers are more likely to demand that a human is involved.

Gavin Northey
Gavin Northey

Lead author Dr Gavin Northey from griffith’s Department of Marketing (GBS) said there were some notable advantages to AI.

“Artificial intelligence reduces the chance of human error, it reduces judgement bias and it gives greater forecasting accuracy and precision,” he said.

“Even though it may offer equally good, if not better, financial advice, consumers tend to consider the performance of AI as inferior to that of a human expert provider.”

Co-authorVanessa Hunter emphasised that the doubt becomes a lot more apparent in higher risk environments.

Vanessa Hunter
Vanessa Hunter

“Even though technology is so ubiquitous, there’s still that mistrust of AI and those Terminator sort of storylines,” she said.

“Thinking back to when airlines introduced self-baggage drop, or supermarkets brought in self-checkouts, people embraced it to an extent, but there still needs to be a person nearby to guide people through the technology.

“We’re incredibly social creatures. We want human interaction when risk is involved.

“The irony here, is the humans are using the same technology. They use the AI to form and provide their considered opinion.”

In what’s likely to be a multi-billion if not multi-trillion-dollar industry for digital online banking, Hunter suggests banks will need to be very careful with how they project themselves as being technologically based.

“It is sort of counter-intuitive considering where we’re at in terms of digital marketing and online use, but the data shows customers, in particular wealthier investors, lose trust in the bank and are less willing to invest if they are only offered AI advice.”