Artificial intelligence (AI) can help the financial services sector to discover vulnerability, as there are certain matters people may find hard to tell other humans.
This is what The Investing and Saving Alliance (TISA) policy executive Sophie Legrand-Green said at its inclusive investing conference yesterday (20 March).
TISA has said financial services companies are placing a great deal of importance on vulnerability due to the Financial Conduct Authority (FCA) identifying it as a fundamental aspect of treating customers fairly.
TISA has partnered with Altus Consulting to develop the Vulnerability Radar tool, an online questionnaire that allows firms to assess themselves on the quality of their practice on customer vulnerability.
It provides a score for different aspects of their business and a graphic display of the results, as well as a series of recommendations.
This comes after the Consumer Duty Alliance (CDA) recently warned more sector-specific guidance on vulnerability is needed, especially in relation to good practice and outcomes.
CDA’s claim follows the publication of the FCA’s findings from its latest vulnerability review.
The CDA said that, for advisory firms, the term ‘vulnerability’ still remains largely associated with identifiable disabilities, rather than more broadly relating to individual client circumstances.
This is validated by the FCA highlighting that in its outcomes monitoring work, it was a small number of firms predominantly in the wealth and asset management sector that had identified zero or very few customers in vulnerable circumstances.
Legrand-Green also added that TISA is calling on the FCA to reduce barriers to AI experimentation.
Numerous speakers at the conference agreed that AI is too big an opportunity to miss.
EY Seren partner and chief design officer Kwame Nyanning pleaded with delegates “not to underestimate AI”.
He added that people are currently not getting the information they need while investing, but AI can process the information and deliver the data.
Morningstar head of adviser solutions EMEA Anastasia Georgiou added that AI is “so exciting for the industry and offers so many opportunities”.
As a tool it can act as a translator for all the jargon in finance, she added.
Vanguard head of product and client experience Liz Waldron also pointed out that the financial services industry need to “reduce the jargon and make it easier for investors”.
Life Moments CEO and founder Ben Leonard agreed, and also warned people to “underestimate AI at your own peril”.
However, Leonard cautioned that there is a “fear of missing out (FOMO) trap towards AI”.
