The article titled “AI-Based Financial Advice: An Ethical Discourse on AI-Based Financial Advice and Ethical Reflection Framework” shows that consumers need to be well-informed about their financial situation to be able to take action when this changes. Automated financial advice could increase consumers’ access to financial advice and, consequently, their financial well-being. Although such advice already exists for various financial products, holistic, automated financial advice has not yet entered the market. This next step requires a definition of good automated financial advice as a basis for financial advice algorithms and a framework to consider the ethical issues involved in implementing such automated advice. This research explores both of these challenges.
Principal Findings
• The definition of good automated financial advice is divided into four components, and defines i) which goal it should have, ii) on which information the algorithm should be based and how it should operate, (iii) what the outcome should look like, and iv) how it should be communicated.
• Laws and regulations are not always sufficient for addressing certain issues that could (un)intentionally affect well-being.
• Ethics can help evaluate potential resistance and preferred aspects of technological innovations that are not subject to dedicated regulations.
• The paper introduces a practical reflection tool that triggers reflection on the ethical requirements of automated financial advice.
Key Takeaways for the Industry
• An ethical perspective must be applied to automated financial advice during the design phase to address in advance the issues that could jeopardise the adoption of automated services.
• Organisations can use the AI4 Ethical Financial Services (AI4ES) framework we developed to broadly incorporate ethics into their financial services.
The open-access article can be found here: https://journals.sagepub.com/doi/full/10.1177/07439156241302279
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