By Tom Murray, Head of Product Strategy, Exaxe
While there are many people who like driving, most driving consists of commuting in urban areas, which is pleasant for no one.
Endless stop-start driving is mind-numbing and frustrating. Automating the process of commuting should lead to happier commuters with fewer accidents due to driver error or distraction. The move by the USNHTSA is a huge step towards moving us into the era of the driverless car.
This is encouraging news for all of us who welcome the improvements that can be brought to our lives by the increasing use of automation to do work that is boring and repetitive, and is therefore much better carried out by machines.
The government’s decision is a strong indication of determination to overcome the obstacles of automation in the area of transportation, and will certainly encourage those of us working on the increasing use of artificial intelligence in the financial services sector.
Automation of the advice process has long been seen as a possible solution to the problem of the advice gap. Given the highly codified nature of financial regulations, they appear ripe for automation. We know that the demand for cheaper advice exists.
Therefore, the case for automating the advice process is clear. However, many details still need to be worked out before we can confidently take financial advice from a robot, even if we can now appoint one as the designated driver on a night out.
Firstly, there is the whole issue of legal responsibility. If the system driving a car is deemed a legal entity, where does responsibility lie in the event of an accident? Clearly one can’t sue the software, so is it the owner, the developer, or the person who may have set the parameters and deployed it who is ultimately responsible for the quality of the driving?
Similarly, if an automated advice system gains legal status, who will be sued in the event of a dispute, say for mis-selling; the owner of the software, those who designed or wrote the code, or those who configured any parameterised settings? This vital question concerning who is going to ultimately have to carry the can in the event of bad advice being given to the customer needs to be completely resolved before any financial advice firm starts looking to recruit C3PO as its new call-centre agent.
Then there’s the capability of the system. Presumably, any driving software will have to display the ability to pass the driving test in any country where it is being licensed. Similarly, automated advice software will have to be able to pass any set of tests that are normally put before human advisers, if they are to be allowed to give strategy and product recommendations to consumers.
Whilst many people within the industry welcome the idea of automated advice solutions, seeing them as the only possible way to provide full advice to the mass market at a cost level that is reasonable, there will undoubtedly be resistance from customers in the early stages. There will be concern about trusting a system to give unbiased advice – the lack of ability to ‘look them in the eye’ to ascertain trustworthiness is something people will be nervous of.
This might appear irrational, however it is no different from the wariness the general public still has about the idea of driverless cars. We are all prepared to take a lift in a driven vehicle, even though only the driver has actual control over the vehicle. So it’s not really the lack of control that makes us wary. Rather it is an innate unwillingness to trust a machine over a human. This is despite the universally acknowledged fact that the ability of machines to do things over and over again without making mistakes massively surpasses a human’s ability to do so. The fear is irrational but still will take much time to overcome.
Similarly, the speed with which people will overcome their wariness of automated financial advice is something that will take time to grow, although it might not take as long as one thinks. Originally, the idea of banking on the phone was deemed to be unsafe, and yet banking by smartphone became the number one way to bank in 2015, just eight years after the first iPhone was released.
One thing is certain; the advance of robots is continuing and is going to have a huge effect on financial services and particularly on the financial advice sector. While it’s likely to be some time before software can truly compete with Independent Financial
Advisers head-to-head, the signs are there automated advice is coming just as surely as that driverless car.
|
