In the wake of the Banking Royal Commission, new research commissioned by think tank – Thinque, has revealed this week that 30 per cent of Australians would trust a robot to offer them financial advice, as faith in the human side of the financial sector continues to waver.
Tellingly, this is compared to just 9 per cent of respondents who would trust a robot to provide psychology/counselling or relationship advice or allow bots to help them make other long-term choices, such as career or marriage decisions.
Global futurist and innovation strategist, Anders Sörman-Nilsson says, “Previously, Australians have trusted digital tools with purely transactional activities such as mobile payments. However, when it comes to more strategic life advice, we are now beginning to trust AI to advise us in sectors such as health and travel, and increasingly we are entrusting robots in the banking and finance sector, as many Australians’ distrust in human advisors has mushroomed in the wake of the Royal Commission. During the last few years, the FinTech sector, their User-Centric Customer Experiences, and their seamless solutions have grown digitally empathetic which has led to their mainstream adoption by Aussies.”
Despite our increasing trust in financial robo-advisors to guide our decisions, the research also highlights that fraud is still a key concern in the financial services sector more broadly, with those surveyed stating that this sector is where they are most concerned about digital fraud (80 per cent) – compared to the Government/public sector (56 per cent), insurance (46 per cent), health (39 per cent), property (37 per cent), and retail (35 per cent).
Offering their reasons for feeling this way, 41 per cent of those surveyed said that the greater amount of data transactions online means information can easily get into the wrong hands, 39 per cent feel hackers/thieves are evolving faster than cyber security technology, 15 per cent believed the average Australian lacks the understanding of emerging payment technology to be able to protect themselves from attacks, while 4 per cent said they don’t believe there’s enough moderation of advancing technology.
Anders adds, “With public distrust in the financial industry at an all-time high banks, retailers and brands must place importance on offering seamless customer transactions, ensuring that their money is in safe hands at all times. With ‘pinflation’ (the term for either using the same pin for everything or the overwhelming management of too many passwords), Australians are becoming very exposed to hackers and fraud, a feeling that is reflected in the sentiment of the research. In turn, consumers must learn to scenario plan when it comes to both fraud and the use of robo (or human) advisors, to ensure their financial safety in any eventuality.”
“In turn, financial advisors in particular need to look at how to rebuild public trust in this digital age. They have lost their voice and partially forgotten to story-tell and build a narrative of trust – digitally – and are thus failing to re-engage Australians – at a time when more Australians than ever actually need financial advice.”
“When looking ahead, the financial services industry will be further rocked when innovations such as Open Banking fully comes into play, which is already in place in other markets. Open Banking requires regulated banks to allow customers to share their financial data with authorised third-party providers (like FinTechs) through APIs. This is to allow consumers to switch banks easily and score themselves a better deal, driving established banks to invest thoroughly in offering the very best customer experience or face the risk of losing many clients to FinTechs,” he states.