People trust robots more than humans with money, global study reveals

The study of more than 9,000 consumers and business leaders in 14 countries found that the Covid-19 pandemic has increased financial anxiety, sadness and fear among people around the world and has changed who and what we trust to manage our finances. In addition, people are rethinking the role and focus of corporate finance teams and personal financial advisors, the research suggests.

The global pandemic has damaged people’s relationship with money at home and at work. Among business leaders, financial anxiety and stress soared by a shocking 186 per cent, while sadness grew by 116 per cent; consumer financial anxiety and stress doubled and sadness increased by 70 per cent.

Ninety per cent of business leaders worry about the impact of Covid-19 on their organisation, with the most common concerns revolving around either a slow economic recovery or the prospect of a recession (51 per cent); budget cuts (38 per cent); and bankruptcy (27 per cent).

Eighty-seven per cent of consumers are experiencing financial fears, including job loss (39 per cent), losing savings (38 per cent), and never being able get out of debt (26 per cent). These concerns are keeping people awake at night: 41 per cent of consumers reported losing sleep due to their personal finances.

This financial uncertainty appears to have changed who and what we trust to manage our finances. To help navigate financial complexity, consumers and business leaders are increasingly trusting technology over people to help. The survey results point to 67 per cent of consumers and business leaders trusting a robot more than a human to manage finances.

In business, 73 per cent of leaders trust a robot more than themselves to manage finances, 77 per cent trust robots over their own finance teams, and 89 per cent of business leaders believe that robots can improve their work by detecting fraud (34 per cent), creating invoices (25 per cent), and conducting cost/benefit analysis (23 per cent).

In the consumer sphere, 53 per cent of consumers trust a robot more than themselves to manage finances, while 63 per cent trust robots over personal financial advisors, and 66 per cent of consumers believe robots can help detect fraud (33 per cent), reduce spending (22 per cent), and make sensible stock market investments (15 per cent).

To adapt to the growing influence and role of technology, the survey suggests that corporate finance professionals and personal finance advisors alike must embrace change and develop new skills: 56 per cent of business leaders believe robots will replace corporate finance professionals in the next five years, while 85 per cent of business leaders want help from robots for finance tasks, including finance approvals (43 per cent), budgeting and forecasting (39 per cent), reporting (38 per cent), and compliance and risk management (38 percent).

Business leaders want corporate finance professionals to focus on communicating with customers (40 per cent), negotiating discounts (37 per cent), and approving transactions (31 per cent).

Consumers believe robots will increasingly replace personal financial advisors over the next five years (42 per cent), with 76 per cent of consumers preferring robots to help manage their finances by freeing up time (33 per cent), reducing unnecessary spending (31 per cent), and increasing the accuracy of on-time payments (31 per cent).

A ray of hope for personal financial advisors is that consumers still want humans to provide guidance on major purchasing decisions such as buying a house (45 per cent), buying a car (41 per cent), and planning for retirement (38 per cent).

The events of 2020 have changed the way consumers think about money and have increased the need for organisations to rethink how they use AI and other new technologies to manage financial processes. Sixty per cent of consumers say the pandemic has changed the way they buy goods and services, while 72 per cent say the events of 2020 have changed how they feel about handling cash, with people feeling anxious (26 per cent), fearful (23 per cent), and dirty (19 per cent) about handling notes and coins. More than a quarter (29 per cent) of consumers now say that cash-only is a deal-breaker for doing business.

Businesses have been quick to respond, with 69 per cent of business leaders claiming to have invested in digital payment capabilities and 64 per cent creating new forms of customer engagement or pivoting their business model in response to Covid-19. Fifty-one per cent of organisations are already using some form of AI to manage financial processes, compared with only 27 per cent of consumers.

Looking ahead, 87 per cent of business leaders say that organisations that don’t rethink their financial processes face an existential threat to their operations, including falling behind competitors (44 per cent), more stressed workers (36 per cent), inaccurate reporting (36 per cent), and reduced employee productivity (35 per cent).

Felicity Burch, director of digital and innovation at the CBI, said: “The pandemic has been a watershed moment for technology adoption. The financial services sector has innovated swiftly to support customers at a difficult time and it’s fantastic to see businesses and consumers alike recognising the potential AI has for managing money.

“Trust will underpin the successful adoption of emerging technologies and so firms must be taking steps like embedding robust governance processes, engaging employees and addressing unfair bias in data.”

Farnoosh Torabi, author and host of the podcast ‘So Money’, said: “Managing finances is tough at the best of times and the financial uncertainty of the global pandemic has exacerbated financial challenges at home and at work. Robots are well-positioned to assist – they are great with numbers and don’t have the same emotional connection with money. This doesn’t mean finance professionals are going away or being replaced entirely, but the research suggests they should focus on developing additional soft skills as their role evolves.”

Juergen Lindner, senior vice president of global marketing, Oracle, added: “Digital is the new normal and technologies such as artificial intelligence and chatbots play a vital role in managing finance. Our research indicates that consumers trust these technologies to accelerate their financial well-being over personal financial advisors and business leaders see this trend reshaping the role of corporate finance professionals.

“Organisations that don’t embrace these changes risk falling behind their peers and competitors, hurting employee productivity, morale and well-being, and struggling to attract the next generation of AI-empowered finance talent.”

Further information about the ‘Money and Machines’ study is available from the Oracle website.

The research was carried out by Savanta, Inc. between November and December 2020 with 9,001 global respondents from 14 countries (USA, UK, Germany, Netherlands, France, China, India, Australia, Brazil, Japan, United Arab Emirates, Singapore, Mexico and Saudi Arabia). The survey explored attitudes and behaviours of consumers and business leaders towards money, finances, budgets and the role and expectations of artificial intelligence (AI) and robots in financial tasks and management.

The pandemic had an almost immediate and lasting impact in 2020 on both cash payments and the broader uptake of digital payments by consumers. On 1 April 2020, the £30 limit for individual payments on contactless cards was increased to £45 to enable more hands-free payments in response to coronavirus concerns. There were suggestions in January this year that the contactless payment limit could be increased further to £100, with many people’s weekly supermarket shop routinely exceeding the £45 cap. Some digital payment systems, such as Apple Pay on iPhones and Watches, already support larger contactless payments.

Another effect of the pandemic, lockdowns and concerns about cash was that online shopping among the over-65s hugely increased, with figures for the amount of time this age group spent using internet retailers doubling compared to 2019.

Access to cash was still a concern, particularly in remote areas and for the older generation, many of whom still rely on it or simply prefer it to using digital payment options. A trial called the Community Access to Cash Pilot, working with the banking industry to identify sustainable solutions to keeping cash viable, began in eight rural locations across the UK.

The pandemic-driven steep decline in cash transactions has had unexpected ramifications for the leading manufactures of ATMs – the familiar high-street cash machine. In July last year, with the number of cash transactions dwindling rapidly in the wake of the coronavirus lockdown, one of the world’s largest cash machine makers called for the implementation of new technologies to ensure that those who still rely on paper money will continue to have access to it.