By Sue van Meeteren,research director at STRAT7 Jigsaw
There was a time, not too long ago, when the primary messaging coming from UK banks and financial advisors was to tell people to ‘save for the future’, promoting products like ISAs.
However, discussing the security of long-term savings isn’t landing well with younger people. We recently surveyed UK adults to get their views on financial planning, and the findings highlighted how younger audiences’ attitudes to finances are changing – especially via their use of technology.
Almost half of millennials and Gen Z now use AI platforms for most of their financial advice, and those users are significantly more likely to choose higher-risk, shorter-term investments. Traditional providers should take particular note that 76% are happy with ChatGPT’s financial advice – more than the 72% who are happy with their paid financial advisors.
In many ways, this makes sense. AI advice is tailored to an individual’s personal needs and doesn’t face the same constraints as a bank. It creates a different relationship with finance, where it seems like a friend is offering guidance rather than a paid advisor – yet perceived as having the benefits of both.
Trust, it seems, has become a hygiene factor rather than a goal. But putting trust in AI comes with disclaimers – and some important caveats: for consumers, that’s whether they can trust the models as much as they think they can; and for financial brands, whether the trust they once took for granted is starting to migrate away. We’ve seen an evolution to trust in information, rather than trust in security.
It also tracks with what we know about younger investors. Are they going to be able to buy a house? If not, they’re going to have to take risks to grow their money – and younger people are usually more open to risk anyway. So perhaps AI advice makes sense in that scenario?
Change your tone
Traditional banking advice is built around authority and long-term stability, but it seems that’s not what everyone wants any more. Instead, banks and advisors need to ground much of their messaging around day-to-day financial decisions rather than focusing on some far-off future.
Financial services’ tone of voice in their marketing will have to change as a result. Focus on growth and try to find ways to be a friend, not a fortress. That might mean downplaying risk, and understanding that for some customers, safety and caution are felt to be less important than helping customers to thrive. Not by leaning into sharp practices, but by emphasising speed, opportunity and growth.
Share their ambition, even if it’s only for the short term. Perhaps even reframe risk by focusing more on the potential reward that risk can provide (and yes, this would be a major shift).
After all, the research suggests that what many people want from their financial advisor is a trusted and clever friend rather than a distant and impassive institution.
Make the most of your existing channels
And yet, despite all this, the survey also revealed that the most trusted source of financial information overall – and among people of all ages – still remains banks’ websites, not AI.
This presents a clear argument for not getting too carried away by the AI hype, not least because many consumers don’t use it, especially those of older generations. AI could be a democratising factor in the long term, but for now it’s still an influential niche.
With that said, there’s also no reason why financial organisations shouldn’t ensure right now that their websites are AI-friendly and AI-optimised, because the bots and algorithms are looking at those sites to develop the advice that they’re currently offering.
The value of the personal touch
There’s a balance to be found and what most AI users like about these tools is the level of hyper-personalisation they get. Consumers are sharing personal information so the financial advice they get is tailored to them and their situation.
As AI sits in the same space as financial advisers, brands could perhaps consider hybrid models where AI handles first line guidance and human advisors handle more complex decisions.
But no matter how they plan to use AI, they should be aware that the desire for personalisation is what’s driving people towards fast scenario-based advice, interactive guidance and instant micro recommendations. However, what’s most apparent is that the tone of voice that suited savers pre-AI isn’t going to track with them now.