Survey reveals consumer appetite for AI in financial services

Out-Law News | 03 Jul 2019 | 3:13 pm | 3 min. read

Consumers are ready to embrace the use of artificial intelligence (AI) in financial services, but businesses need to make sure that they have implemented ethical processes to give their customers comfort. That is the main message industry should take from a new study, an expert in fintech law has said.

Pinsent Masons, the law firm behind Out-Law, partnered with trade body Innovate Finance to better understand consumer attitudes towards AI in financial services. Their report charts the results of a survey of 800 UK adults and views expressed at a series of workshops.

The study found that many financial services customers are embracing the use of AI-driven solutions in the sector – just 13% said they wouldn’t want to use AI at all, while 63% of consumers said they are comfortable with AI being used to answer every day queries, 40% for carrying out credit checks and 45% for providing insurance quotes.

However, the survey results also show that maintaining the central role of humans in designing and deploying AI technologies is crucial in transforming the industry and garnering greater consumer trust, said Luke Scanlon of Pinsent Masons.

"What we can see from the research is that consumers are open to the use of AI in financial services but, as with the adoption of a lot of technology, there are legal, ethical and cultural challenges to overcome," Scanlon said. "Early adopters are comfortable with using AI across a multitude of services and see the benefits of it in streamlining certain processes."

"Over time, as the technology evolves, we would expect to see use figures across a breadth of services increase as customers have more time to adjust and financial services have time to build greater trust in the use of AI systems," he said.

The survey found that 60% of customers always want to know when they’re engaging with an AI system, and 64% stated that they should always have the choice over whether decisions are made by an AI system or a human advisor.

Consumer concerns that the data used by an AI service is inaccurate or biased were also apparent from the survey results, Scanlon said.

"Businesses must be able to explain to customers how AI is being used and how decisions have been made to help dispel negative perceptions of the use and trustworthiness of AI amongst consumers," Scanlon said.

The biggest fear consumers have from using AI solutions is that their data is hacked, according to the study. Scanlon said that it is therefore not surprising that customers are not as willing to use services that require more data from them, particularly where the benefits of the use of the technology and their data has not been clearly explained to them. It is incumbent on businesses deploying AI solutions to implement "digital and physical security measures to protect customer data and take into account the enhanced risk of AI being used for malicious purposes", he said.

The survey also explored consumers' views on who should be held responsible when things go wrong with AI-driven services. More than half of the respondents said they believe the bank or financial services provider should be liable in such situations.

Scanlon said: "Existing liability models and frameworks may be used to attribute liability where AI is fault but there is still a lot of work to be done in managing new risks which AI technologies introduce. Financial institutions looking to use AI need to think carefully about what it means to treat customers fairly and clarify how liability can be allocated when using AI technologies as clearly the human element remains important to customers."

Charlotte Crosswell, chief executive of Innovate Finance, said: "As technological capabilities evolve, AI looks increasingly set to become a key part of how financial services companies manage their business, their products and their customer relationships. It’s an exciting time to explore these developments, as well as the new and innovative services that many fintech companies are bringing to the market."

"We’re already seeing significant proportions of consumers feeling comfortable enough with AI to help them answer everyday queries and early adopters are happy with its use for a quick, efficient answer to mortgage or insurance quotes. As financial institutions and financial innovators explore the use of AI to better adapt their products and services, we need a reliable and responsible framework for AI adoption which places the customer at its core.  We see this as an opportunity to engage in further conversations with policy-makers and regulators to explore how AI can enhance the future of finance," she said.