Loading… An exploration of robo-advice and behavioural bias.
For those who are unfamiliar, robo-advisers are digital platforms that provide automated, algorithm-driven financial planning services. With little to no direct human contact, they can provide a great, inexpensive alternative to traditional face-to-face guidance and advice.
One might think that bias would be less of an issue when it comes to robo-advisors (this isn’t I Robot after all). However, without a human adviser present, customer bias can become an even greater issue than it is in the “real world”.
If customers are unaware of their biases, they are perhaps even more likely to be spooked or put off by unwelcome or confusing information without an adviser at their side. This can lead to hasty and self-damaging behaviour, such as premature encashment or even leaving the service.
Yes, robo-advisers are a low-cost option, but you don’t need me to tell you there’s a problem if customers and providers alike are losing out on potentially long term and profitable relationships for both parties.
By using Wi-Ai products on their platforms, robo-advisers can incorporate and share assessments of users’ biases. Wi-Ai tools are an engaging way for customers to take ownership of their behaviour and thus de-risk robo-advice and similar systems.