Artificial intelligence (AI) can be a useful tool to turn risk into opportunity, but requires advisers to be mindful of those risks and guardrails about the technology.
This is according to Setul Mehta, Royal London’s take to market lead, who was taking part in a panel debate on the final day of Income Protection Action Week, who explained that Consumer Duty and AI are interlinked.
Consumer Duty and AI are interlinked
“The duty sets the rules and the expectations AI has to meet those in the same way as in a pre-AI world an adviser has to meet the requirements of the duty,” Mehta said.
“You then bring it a step forward, the FCA hasn’t to the best of my knowledge yet created an AI handbook so what does that mean? If you’re using AI to support outcomes-based principles, you need good advice, be clear, fair, and not misleading and all the things that we’d expect that we would do day-in-day out, and AI just needs to support that and be cognisant of that.”
Risks and opportunities
Metha added that ultimately advisers should use AI to monitor the risks and give them some ideas of the risk that might exist and how they can turn that round into opportunities or manage those areas.
“Use it to be able to enhance how you engage with customers and seek opportunities,” he continued. “But just be mindful of the risks because ultimately it’s still down to whether using AI in advice or as a supporting act, it’s being cognisant of the risks and the guardrails around it.
“So it’s that professional judgment and making sure you check the outputs, you’ve engaged in it and if you notice something, you then do something about it, and not turn a blind eye.”