Help! A robot’s taken my money!
31 May 2017
While scenes of droves of robots in the workplace or on city streets may still be far off, artificial intelligence is already firmly entrenched in daily life. But a new study sponsored by ING suggests financial institutions may face challenges in getting consumers to trust this new technology when it comes to handling their money.
Digital personal assistants on our smartphones, music recommendations from streaming services and purchasing predictions from online retailers are just some of the more obvious examples of artificial intelligence permeating our daily lives.
Many of us, without even knowing it, have also chatted with a customer service robot or read a news article that was entirely written without a human being involved.
Robotics and artificial intelligence are revolutionising countless areas that impact our lives, including the world of finance. To ING, artificial intelligence isn’t unknown territory. It’s already used in digital advisers like Coach Epargne, Genoma and Moje ING to help customers make savings and investment choices.
Robo-advice can also be used to fully automate investment decisions to make investing easier and more accessible to retail customers, helping them achieve better financial returns and ING to diversify its income.
But according to the ING International Survey Mobile Banking published today by ING Group Research, there is still resistance among consumers when it comes to automated financial services.
The survey conducted among some 15,000 people in Europe, the USA and Australia found that one-third of them want no automated financial activities at all. Only two percent would trust a fully automated robo-adviser to invest their money on their behalf, and only 26% would opt for robo-advice even if they got final approval on all decisions.
According to Nathalie Spencer, Behavioural Scientist at ING Group Research, people’s views on this new technology can be explained by a reluctance to give up control.
“People have a lot of faith in their own ability to make the best decisions. At the same time, we know from research that computer programmes can outperform humans, so technologies like robo-advice have the potential to be very advantageous for consumers.”
She expects that as people learn more about this tech, they will likely be drawn to the convenience and personalisation on offer, although the survey clearly shows that people will still want to feel they have the final say on investment decisions.
“It’s up to us now to understand better how we can address that need for control so that people can take advantage of robo-advice’s potential to improve their financial positions.”
Getting used to it
Martin Krebs, Global Head of Retail Investment Product Solutions who is coordinating the roll-out of robo-advice within ING from ING’s German headquarters in Frankfurt, is confident that as consumers become more familiar with automated investment advice, they will see its advantages and embrace it.
“It takes a little while for people to get comfortable with new technical possibilities. Twenty-five years ago it was hard to imagine that one day people would entrust billions in savings to online banks. Now that’s a daily reality.”
ING now focuses on rolling out robo-advice to customers who already have some familiarity with investing, says Krebs.
“That group understands the advantage automation has to help them easily diversify their portfolios compared to the time-consuming process until now of handpicking investments.”
But he also sees the potential to attract new customers to investing and to overcome any concerns about giving up control.
“For people looking for an alternative to saving, robo-advice provides a level of service that until now that was only available to customers with large investment portfolios. It tailors and manages investments to meet individual needs and risk appetites. That makes it easier to achieve a particular investment goal.”
“As for control, the digital age provides people more possibilities to actively follow and steer their investments than ever existed before. It’s up to us now to design products with features that let people do that.“