Ireland’s perennial problem of consumer inertia could be tackled head-on by effective use of Artificial Intelligence (AI). This is according to six in ten compliance professionals operating in Ireland’s financial service industry, who believe that through the technology’s identity verification and data capture capabilities – the amount of time it takes to safely and securely onboard customers for banking and other financial services could be significantly reduced, thus making it easier for consumers to shop around and switch – and in turn pocket valuable savings.
Almost one in five (18pc) compliance experts say that they believe that the risks of AI outweigh the benefits of the technology, while one in four (25pc) however are relatively confident in the technology, feeling AI has an equal amount of risks as benefits. One in eight (13pc) go as far as saying they believe the advantages will outweigh the risks.
This is according to the findings of a new survey by the Compliance Institute, which polled 175 compliance professionals working primarily in Irish financial services organisations nationwide on their attitudes towards AI, a technology which has developed at a rapid pace in recent years.
Commenting on the survey findings, Michael Kavanagh, CEO of the Compliance Institute said:
Mr Kavanagh explained:
“It has long been accepted in Ireland that a general apathy and lack of proactivity when it comes to consumer behaviour around financial products and services costs the public thousands of euro every year. In Ireland, people very rarely switch banks or shop around for financial products and are slow to move insurers, with recent Central Bank research showing that only one in four people switch their car or home insurer when renewing their policy.
It could be that the correct use of AI could actually benefit consumers by significantly reducing the amount of time and effort consumers have to put into doing things like switching banks or insurers.
AI has the potential to also reduce customer onboarding costs to those organisations operating within the financial services industry. Know Your Customer (KYC) and the whole onboarding system is still relatively old-fashioned in many organisations when you think of how far we’ve come technology-wise in the last 10 to 20 years. The costs and time involved on both sides are still too high and there is an expectation that AI could be employed to reduce both. If a person had to jump through just one hoop instead of ten to change their banking provider, there’s a good chance they’d be more likely to do it”.
When it comes to the AI’s risk benefit ratio, our survey found that for almost half of the compliance practitioners asked, the jury is still out. However, most have confidence in its ability to drive change for the better when it comes to consumers and switching”.
The Compliance Institute says however, that the depth of the concerns revealed in the study around AI – and the potential for the technology to cause harm – should not be underestimated.
Mr. Kavanagh cautioned,
“Some of these concerns relate to privacy and misinformation issues, the potential of the technology to lead to job displacement, or even the risk of AI-altered images and videos disrupting the democratic process. This is why strong regulation in this area is so important and why the recently approved EU AI Act is so necessary. This regulation should ensure that AI systems are designed, developed and deployed in an ethical and trustworthy manner and that the fundamental rights, health and safety of the individual are protected while promoting responsible innovation.”
