What is the story
Artificial Intelligence (AI) is increasingly used by major banks and investment firms to offer financial advice and predict market trends.
Morgan Stanley, for example, uses AI to compensate for potential biases in financial analysts’ stock forecasts.
Goldman Sachs also announced a pilot program using AI for coding, although the division is still unknown.
However, despite this trend, a recent study shows that public trust in these AI advisors varies significantly based on individual characteristics and knowledge of the technology.
Study reveals varying levels of trust in AI advisors
The study included 3,600 American participants who were asked to imagine receiving sotck exchange advice from human experts, AI or both.
The results showed a general reluctance to follow advice if participants knew it was generated by AI.
However, this distrust was not uniform across all groups.
Women were more likely (7.5%) than men to trust AI advice, while those more knowledgeable about AI were also more receptive (10.1%).
Meanwhile, Democratic Party supporters were more open to AI advice, at 7.3 percent.
Simplicity of AI methods builds trust
The study also found that participants were more likely to trust simpler AI methods.
When they were told the AI used “ordinary least squares,” a basic mathematical technique, they showed more confidence than when they were told it used “deep learning.” , a more complex method.
This indicates that people tend to trust things they understand better, much like one might trust a simple calculator rather than an unfamiliar scientific instrument.
Building trust in AI is crucial for the financial sector
As AI continues to penetrate finance, businesses will need to focus on building trust.
This could include educating people on how AI systems work, being transparent about when and how AI is used, and balancing human experts with AI.
The study says it’s not just about improving technology, but also understanding how people perceive it.
The goal is to make AI not only a powerful tool, but also a trusted advisor for important financial decisions.