AI is increasingly being used in robotrading, yet despite the growth in artificial trading, a recent study from Griffith University explains that bank customers are still reluctant to receive financial advice from artificial entities.
Chatbots are a common presence in many banks, especially in customer service functions. The success of these apps has emboldened some banks to try rolling out robo-advisors to provide automated financial advice. The researchers estimate that such AI advisors will be managing around a trillion dollars in the US alone soon.
Little faith
While such tools are increasingly common, there is less evidence that the public has faith in them. The research found that while smaller tasks like opening an account or depositing relatively small amounts were seen as acceptable, there was less demand to see robo-traders dealing with anything more substantial. This is despite the authors being bullish about the benefits.
“Artificial intelligence reduces the chance of human error, it reduces judgment bias and it gives greater forecasting accuracy and precision,” they explain. “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.”
The doubts over the capabilities of the AI tool became even greater as the stakes became higher, with the authors believing that confidence has been undermined by unfair and unrealistic media headlines.
“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,” they continue. “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.”
This reticence is unlikely to hold the technology back for long, however, with robo-trading already a huge offering in the banking industry. It does underline how banks should deploy a degree of care in both how the technology is rolled out and how they themselves project the level of technology behind the curtain.
“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,” the authors conclude.
