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The robot-versus-human-advice narrative is lazy. It completely misses the point of how digital challengers are shaking up traditional industries and does a disservice to consumers.


Search trends show the term ‘robo-adviser’ entered the UK’s collective consciousness in 2014. Strictly speaking, robo-advice is automated investment portfolio management – or at least it was in 2008 when it took off. Betterment is a good early example in the US.


Fast forward to today and its meaning has mutated, perhaps due to societies normalised preconception to consumer focused automation. The blanket term Robo Adviser is used (with varying accuracy) to describe fintech companies that use artificial intelligence and/or algorithms to recommend products to customers – evidenced by the monotonous reporting on robo-advisers which is almost always accompanied by a stock image of an android or cyborg.


It’s also used in a fairly reductive way that almost always pits robo-advisers against traditional, human advisers. Often this misrepresents robo-advisers as entirely human-less solutions.

In reality, humans are integral and essential to robo-advice.


The human element

Algorithmic advice is powerful. It can free human advisers from labour-intensive administration so that they can spend more time focussing on the customer. These efficiency gains can be passed on to the customer so that they don’t have to pay for advice.


What’s more, algorithms are less susceptible to the kinds of biases that can colour human advice. For example, a human adviser could gold an unconscious bias against a lender who they know has lengthy or complicated criteria. An algorithm doesn’t care – it only knows how to give the customer the best advice.


But even beyond the need for humans to write and maintain code, humans are absolutely integral to the robo-advice model. No matter how sophisticated natural language processing gets, customer questions are best dealt with by a human expert – especially with complex financial products that customers are emotionally invested in.


Trust is essential. Trust takes time to develop. Only human advisers can build a rapport with a customer to earn their trust. Equally, people need reassurance when they’re making such big decisions and tend to feel less comfortable without a human being involved – which is why the robo-adviser label can be so harmful.


Richard Hayes, CEO of online mortgage broker Mojo Mortgages, outlines how the humanised element for his company has resulted in a higher rate of customer satisfaction. “There are customers out there that want to transact digitally, and there are also ones that want a human touch. Particularly with complex financial products such as mortgages, we’ve found there are also customers that want a hybrid of the two. Our balance between human and technology, allows us to create the perfect mortgage experience for consumers thereby giving them a greater sense of confidence when buying”.


Will the times be-AI-changing?

It’s important to question whether the omnipresence and increasing frequency of fintech businesses has encouraged society to think of AI led B2C’s as robo-advisers?


Take mobile banking for instance. A few years ago, companies like Monzo and Revolut were the only big players in the industry – now, there are close to 10 mobile banking enterprises all trying to take a piece of the fintech pie.


It could even be suggested that companies unrelated to the fintech brand are also doing their best to continue the robo-adviser label by incorporating AI into their previously one-dimensional strategy.


Europe’s leading fashion retailer Zara is looking to launch an augmented reality app in its 120 stores. Using their smartphones, customers will be able to see mannequins walking around the shop while wearing available clothing in store.


As we all move further into the world of connectivity, societies relationship with AI, Machine Learning, VR, AR, appears to be hyper-normalised. Daily commuters take for granted the technological sophistication behind train barriers, and shoppers a like with self-scanning machines.


But, with technology on every corner it’s understandable that society brands fintech companies with the term robo-adviser, while unfortunately forgetting about the human element lying beneath their complex algorithmic make-up.



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