Research shows how much people trust AI with financial decisions
What's the story
Artificial intelligence (AI) is being increasingly used by leading banks and investment firms to offer financial advice, and predict market trends.
Morgan Stanley, for example, employs AI to offset potential biases in financial analysts' stock market predictions.
Goldman Sachs has also announced a pilot program using AI for coding, though the division is still unknown.
However, despite the trend, a recent study shows public trust in these AI advisors varies widely depending on individual traits and knowledge of the technology.
Trust spectrum
Study reveals varying levels of trust in AI advisors
The study included 3,600 US participants who were asked to imagine receiving stock market advice from human experts, AI, or both.
The findings showed a general reluctance to follow advice if participants knew it was AI-generated.
However, this distrust wasn't uniform across all groups.
Women were more likely (7.5%) than men to trust AI advice while those with more knowledge of AI were also more receptive (10.1%).
Meanwhile, the Democratic Party supporters were more open to AI advice by 7.3%.
Methodology matters
Simplicity in AI methods boosts trust
The study also found that participants were more likely to trust simpler AI methods.
When they were told the AI was using "ordinary least squares," a basic mathematical technique, they showed more trust than when told it was using "deep learning," a more complex method.
This indicates that people tend to trust things they understand better, much like how one might trust a simple calculator over an unfamiliar scientific instrument.
Trust building
Building trust in AI is crucial for financial sector
As AI continues to permeate finance, companies will have to focus on building trust.
This could include educating people about how AI systems work, being transparent about when and how AI is used, and balancing human experts with AI.
The study indicates that it's not just about improving the tech but also understanding how people perceive it.
The aim is to make AI not just a powerful tool but a trusted advisor for important financial decisions.