Recent research from PensionBee reveals an interesting paradox in the UK pension landscape. A survey was conducted on behalf of PensionBee involving one thousand adults selected to be nationally representative of the UK as a whole.
The results are quite illuminating and tell us a lot about our attitudes towards AI
While private pension account savers are increasingly comfortable with artificial intelligence playing a role in managing their retirement funds, they’re not yet ready to hand over complete control to AI.
This hesitation isn’t rooted in technophobia: In fact 82.0% of UK savers view AI-assisted pension support positively, or at worst were neutral about it.
Only 16.0% of those surveyed said that they would want full human service.
Rather, the findings reflect an understanding among the respondents, of where AI excels, and where human expertise remains invaluable.
The reluctance of retail investors to embrace fully automated pension services stems from several key factors
Firstly, retirement planning can involve complex, life-changing decisions that often require emotional intelligence and contextual understanding. While AI performs well at processing data and providing timely responses, it can’t fully replicate the empathy and judgment that human advisors bring to the table.
It’s also notable, that only 11.0% of survey respondents felt comfortable with AI taking the lead in pension management, highlighting a trust or perceived ability gap.
You can understand their reticence
It’s not quite the same thing, but I am sure we have all experienced the pain of trying to explain our requirements to an automated call-handling system, only to be misdirected or even worse, cut-off, and end up having to repeat the whole process again perhaps more than once, before we get to speak to a human agent or advisor.
Transparency is also a concern, with 79.0% of savers emphasizing the importance of understanding how and why, AI makes investment decisions with their pension funds.
This desire for clarity suggests that savers want to maintain a sense of control and understanding over their financial future.
Something that purely AI-driven services might struggle to provide. Given that even the creators of some of today’s AI chatbots and large language models have admitted that they don’t fully understand how their creations work.
The ideal scenario, according to the PensionBee research, appears to be a hybrid approach
A significant 68.0% of survey respondents would prefer either an equal mix of human and AI support or a human-led service with AI assistance.
This preference for human interaction indicates that savers recognize the contribution that AI can make in areas such as 24/7 availability and rapid response times. While still wanting access to human expertise, understanding, and soft skills, when more complex situations arise and need resolving.
Looking ahead, the challenge for pension providers, and perhaps for all retail-facing financial services businesses, isn’t about choosing between AI or human advisors, but rather finding the right balance between both.
As AI technology continues to evolve, its role in pension services will likely expand
However, the PensionBee research suggests that success in the pension industry of the future may depend on a provider’s ability to harness the efficiency that AI offers while maintaining the human connection that would-be customers value.
This suggests that the next stage in the evolution of pension services provision and support isn’t about replacing human advisors with AI, but more about using technology to enhance and improve the human-led customer experience, which is something I am sure we would all welcome.
Indeed some so-called robo-advisor AI’s already allow their clients to keep in touch with their portfolio, its performance, costs etc. in real time via an App. Which, can also allow the client to interrogate their accounts, research opportunities, kick the tires of the firm’s investment processes, and the options available to them.
These changes will inevitably take time, systems will evolve and businesses adapt.
If we think back just a couple of decades, mobile phones were once a rarity, but they eventually became ubiquitous and then transformed from simple communications devices, into the handheld supercomputers that we rely so heavily on today.
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