INSIGHTS BY George Haramis
How AI earned our trust & primed consumers for Digital Advice
A recent article from the AFR about how the future of financial advice is digital and human suggests winning people’s trust is key.
However, research shows that technology has already earned our trust.
Consider some of the things a typical consumer relies on an algorithm or AI for:
- Choosing the next song for a playlist
- Finding a new binge-worthy show on their streaming service
- Showing additional products they might like to consider when making a purchase.
And it’s not just these low-impact areas where AI has made consumers’ lives more comfortable or enriched. We’re also far more willing to engage with financial tools or products online.
- Around 86% use mobile or internet banking to check their balance and pay bills.
- Almost 40% leave wallets at home and use mobile phone and smartwatch payments instead.
- 70% reported not having visited a physical branch in the past month*.
- 46% of Health Insurance and 42% of car insurance was purchased online in 2023**.
Those figures would have been unimaginable just ten years ago.
Further research published in Nature, shows people rely substantially more on algorithmic advice for difficult tasks.
And a global survey from Oracle found two in three people say they would trust robots more than humans to manage their finances.
Perhaps it’s not consumer trust that needs to be earned? But that of the financial services industry.
It’s easy to see why. Financial advice faces rigorous compliance and regulation that seem to expand yearly. It is still dealing with the aftermath of a Royal Commission, much related to the provision of conflicted financial advice. It’s a natural reaction to not trust anyone or anything but yourself when it comes to delivering advice.
But it’s this fear that stops the industry from realising the benefit.
Algorithms and AI are devoid of personal bias. They have no say or input—only the advice rules fed into them, and they will never deviate from those.
And, because it can run scenarios beyond anything manually possible, the advice provided at the end is always going to be in the client’s best interest.
The Other Adviser
As moneyGPS is rolled out across advice and accounting firms in Australia, we’re often asked by financial advisers if they can ‘tweak’ the advice before it’s presented to the client.
The answer is no, and here’s why. The benefit of a digital-advice solution is that it acts as ‘The Other Adviser’. An independent resource that can churn out compliant single-topic advice without needing input from a human.
People get involved along the journey, such as someone from an advice practice or a moneyGPS Coach, who acts as a sounding board if the client needs it during the advice process.
Digital advice is for millennials, underserved or orphan clients, and those who cannot afford or do not need face-to-face comprehensive advice. As far as I can tell, this service will always need to be delivered by highly skilled and qualified people.
Consumers are ready for digital advice; now it’s up to practices to give them what they want.
Book a 30-minute chat with me to discuss joining the other advice and accounting practices offering digital advice.
* AusBanking
** Statista
*** Oracle
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accountantsGPS and moneyGPS SaaS products provide affordable, compliant digital advice and SMSF services, to Australians through; Institutions, Accountants, Financial Advisers, Superfunds and Employers.
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Fiduciary is an Australian Fintech and owner of accountantsGPS and moneyGPS—SaaS products that provide affordable, compliant digital advice and SMSF services, to Australians through; Institutions, Accountants, Financial Advisers, Superfunds and Employers.
Designed by finance industry stalwarts George Haramis and Drew Fenton and created by a team of tech heads, it combines all the brilliant parts of the financial services world in a simplified, user-friendly way.
accountantsGPS integrates with BGL’s API extracting data from BGL’s Simple Fund 360 SMSF administration software to produce a digital SMSF Check-Up report.
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