Remember 2019? That may have been the last time anyone wondered about the dangers of artificial intelligence.
There’s no point restating the many ways the COVID-19 pandemic hammered people and organizations over the intervening year. Many organizations turned to digital tools to keep the lights on–in most cases accelerating tech modernization plans already in place. One of those tools was artificial intelligence. Only a few years ago this technology was something of a novelty, but today it’s almost impossible to visit a consumer website, corporate intranet or health app that doesn’t incorporate a chatty interactive presence typically called a chatbot.
It turns out that people see these robotic interfaces as more than dressed-up repositories of FAQs or scheduling tools; they see them as trusted advisors, objective counselors, and in many cases as labor-saving devices that eliminate rote work and let people get back to their real lives.
Nowhere is this more obvious than in the twinned realms of personal and corporate finance. Usually worlds apart–and usually served by very different websites and managed by professionals with different credentials–both corporate and personal finance realms rely on people–tired, stressed-out, if-not-depressed, anxious people–to make critical decisions. Should we make this acquisition? Do we need to lay people off or launch a hiring spree? Do I have enough money to retire? Should I invest aggressively or conservatively?
Survey: For their money, people trust robots over people
Increasingly, as business and economic stressors accumulate, corporate leaders and individuals are putting their trust in robots over human advisors.
The COVID-19 pandemic has increased financial anxiety, sadness and fear among people everywhere, and has changed who and what people trust to manage their finances, according to a new study by Oracle and market research firm Savanta. The key finding is that people are rethinking the role and focus of corporate finance teams and personal financial advisors.
The survey of more than 9,000 consumers and business leaders in 14 countries produced several useful observations:
- Among business leaders, financial anxiety and stress increased by 186% and sadness grew by 116%; consumer financial anxiety and stress doubled and sadness increased by 70%.
- 90% of business leaders worry about the impact of COVID-19 on their organization, with the most common concerns centering on a slow economic recovery or recession (51%); budget cuts (38%); and bankruptcy (27%).
- 87% of consumers are experiencing financial fears, including job loss (39%); losing savings (38%); and never getting out of debt (26%).
- These concerns keep people up at night: 41% of consumers reported losing sleep due to their personal finances.
“Financial processes in our personal and professional worlds have become increasingly digital for many years and the events of 2020 have accelerated that trend,” said Juergen Lindner, Senior Vice-President of Global Marketing at Oracle. “Digital is the new normal, and technologies such as artificial intelligence and chatbots play a vital role in managing finance. The research indicates that consumers trust these technologies to accelerate their financial well-being over personal financial advisors, and business leaders see this trend reshaping the role of corporate finance professionals.”
AI Gets a Makeover
From 2001: A Space Odyssey’s HAL 9000 to James Cameron’s Terminator, artificial intelligence has been branded with a bad rap in popular culture. Among intellectuals, AI’s reputation isn’t much better; see MIT Sloan’s Erik Brynjolfsson and Andrew McAfee’s seminal work, “Race Against the Machine.”
As recently as November 2019, 27% of workers were afraid that AI was coming for their jobs. What a difference a pandemic makes.
This more recent Oracle/Savanta survey tells a far different story. Consumers and business leaders say they increasingly trust technology over people to help navigate financial complexity. Again according to the survey:
- 67% of consumers and business leaders trust a robot more than a human to manage finances.
- 73% of business leaders trust a robot more than themselves to manage finances; 77% trust robots over their own finance teams.
- 89% of business leaders believe that robots can improve their work by detecting fraud (34%); creating invoices (25%); and conducting cost/benefit analysis (23%).
- 52% of consumers trust a robot more than themselves to manage finances; 63% trust robots over personal financial advisors.
This doesn’t spell the end of certain careers, but it does mean a shift in what many people, including corporate finance professionals, do at their jobs.
“Managing finances is tough at the best of times, and the financial uncertainty of the global pandemic has exacerbated financial challenges at home and at work,” said Farnoosh Torabi, personal finance expert and host of the So Money podcast. “Robots are well-positioned to assist; they are great with numbers and don’t have the same emotional connection with money. This doesn’t mean finance professionals are going away or being replaced entirely, but the research suggests they should focus on developing additional soft skills as their role evolves.”
Companies that recognize this new normal will have a more motivated workforce and be better equipped to attract the best new talent, according to Lindner.
“Organizations that don’t embrace these changes risk falling behind their peers and competitors. This will hurt employee productivity, morale and well-being, and will make it harder to attract the next generation of AI-empowered finance talent,” Lindner said.