AI Financial Advisors: Is the World Ready?
Like it or not, chatbots and virtual assistants are now part of our lives. From hailing a taxi to ordering pizza or personal shopping, businesses are looking at how artificial intelligence can enhance customer experience. The financial sector is no different, with AI financial advisors now a reality.
Are you ready to let AI financial advisors tell you how to manage your money?
What Is Artificial Intelligence?
Chatbot messaging apps are used on many retail and advisory websites to deal with common customer questions based on pre-programmed rules. Virtual assistants, however, are taking our digital experience to the next level using AI. Not only do virtual assistants understand what a person wants from them, but they can also have a better understanding of emotion and context.
Using AI for Financial Advice
If you need financial advice, you might look to your bank, building society or a financial professional. Human advisors have the training, expertise and ability to analyse data to help you make the right decisions with your money. Yet, so do AI financial advisors, who can handle even more data to offer better qualified advice without human instinct being a factor.
A PwC report looking at the potential for AI in the financial sector found that “while human financial advice is costly and time-consuming, AI developments have made it possible to develop customised investment solutions for mass-market consumers.” They said that “The technology and data is in place, though customer acceptance would still need to increase to realise the full potential.”
AI Financial Advisors: Pros and Cons
One of the advantages of using AI financial advice is a potential to offer tailored and more accurate advice to customers. This is because AI will become faster at crunching numbers and analysing data than humans, especially as technology continues to evolve.
In addition to this speed and accuracy, AI financial advisors cost a fraction of a human equivalent — and they’re readily available 24/7. With virtual assistants already commonplace in smartphones (Siri) and home hubs (Alexa), AI is making financial advice much more accessible and convenient.
Are there only upsides to AI financial advisors? Not necessarily. As the PwC report points out, trust among customers still needs to grow before the technology is fully embraced. This is both down to the fact we still trust human interaction over AI and doubts over the security of our information.