Expert conversational artificial intelligence (AI) will quickly become the industry standard for delivering financial guidance in a cost-efficient manner, according to fintech AI firm Engage Smarter.

Engage Smarter argued that conversational AI would help close the financial guidance gap while reducing industry costs by up to 90 per cent.

This would “transform” the lives of UK financial services customers and pension scheme members who are currently excluded from receiving knowledgeable support and guidance, the company stated.

Its white paper, Mind the financial guidance gap: The compelling case for Conversational AI, combined industry research with Engage Smarter’s field data to provide an account of the impact that conversational AI agents and chatbots are having on financial guidance.

The firm said that this transition would ensure compliance with Consumer Duty, and cut the cost of customer and member management by 80 per cent.

Furthermore, it stated that conversational AI agents were 90 per cent cheaper than human-provided guidance and delivered a 30-50 per cent improvement in productivity, while achieving “significantly improved accuracy” compared to human agents.

The paper also sought to address the common concerns with conversational AI, arguing that it would not replace human workers but it would free them up to focus on their “strengths and areas where they add most value”.

Commenting on the paper’s publication, Engage Smarter market strategy director, Andy Dickson, said: “The latest data from the FCA showing that just 8 per cent of consumers are currently receiving full financial advice while most adults get no guidance at all with their personal finances.

“Conversational AI agents have an invaluable role to play in making accessible, relevant and compliant financial guidance a reality for millions of excluded UK savers and pension scheme members.

“AI-driven chatbots enable more people to have access to intelligent and reliable guidance at a much lower cost.”

Engage Smarter CEO, Matt Gosden, added: “As rules-based industries, pensions and financial services lend themselves to AI machine learning.

“Recent progress with conversational AI agents, including our own, has achieved human-friendly and context-aware responses that understand the intent behind the question, not just the literal meaning or picking out a limited answer based on a single keyword.

"This allows savers and members to find answers and solve issues on their own time and on their own terms.”

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