Financial robot: never without the intervention of a professional

Do you have questions about using the financial robot? Here’s what you need to know about it.

When you hear the words financial robots, do you imagine devices that you only need to consult in order to make the best investments? Think again. This device type does not exist. “What does exist, however, are partial robots, that is, software suites that use extremely powerful algorithms to extract data,” says Michel Mailloux, co-founder and director of the College of Financial Professions, which must enrich the knowledge of professionals. »

Financial bots draw their data from many major studies conducted each year, particularly regarding consumer behavior, the type of portfolio they choose based on their age or area of ​​expertise, as well as the risks associated with different types of wallets. “For example, they allow us to see that people of a certain age, occupation or level of wealth generally invest in a certain product,” says Michel Mailloux. Or even that a particular product or insurance would be relevant to a particular type of consumer. »

The financial robot can then link the collected data and the client’s data (if available), allowing it to create “suggestions”, as Michel Mailloux used the word. But watch out! advises that disclosures should only be made to financial services advisors who, upon review, will use them to advise their client. “The direct connection between the financial robot and the client must be absolutely avoided,” says Michel Mailloux, “because it could lead to disasters. »

Why such a warning? Because financial products are as numerous as they are complex, and the vast majority of consumers do not have the necessary knowledge to navigate them. And also because this robot is aimed at a rational being, whereas, according to Mr. Mailloux, the consumer in general is not.

There is also the fact that the financial robot, despite appearances, is not objective. Since it was programmed by humans, it is quite possible that biases or even prejudices (related to the products of a financial institution, for example) were transferred to it during programming. “As professionals, we notice,” says Michel Mailloux. But that’s not the case with Mr. and Mrs. Everyman. » Not to mention the fact that using a robot also entails certain risks in terms of personal data protection.

A lot also depends on the type of programming used. Michel Mailloux takes the example of a young professional in his thirties with a very substantial income (and therefore able to take risks), but with a very conservative profile. “Will the bot respect your profile? Or will it take more into account life cycles? “, he asks.

He states that the design of the robot will depend on the philosophical approach adopted during programming. In his book Financial Robots and AI, Michel Mailloux, who is an ethicist, describes different possible approaches, namely consequence ethics, deontological ethics, and virtue ethics, as well as the impact of these approaches on robot suggestions. .

Original role

So what is the role of a financial services advisor in this context? It consists first of all in “questioning” what the financial robot says using your “common sense”, in the words of Michel Mailloux. Then take the necessary distance to give your client advice that is truly tailored to their situation. “A financial services adviser has a responsibility to present his client with options that suit him,” says Mr Mailloux. They must also warn him of the consequences associated with it. »

Using a financial robot is not always easy. Because it is extremely difficult, if not impossible, for a professional to know what steps this bot took to make its suggestions. Mr. Mailloux also foresees legal debates in the coming years related to the liability of professionals who do or do not follow the robot’s suggestions. And he hopes to establish a committee or roundtable from the Treasury or another body whose mandate will be to study the main issues raised by the use of a financial robot. “We must not leave the management of bots to large organizations,” he says. Their role is not to protect consumers. »

In the meantime, what can we do to protect ourselves? “Inform yourself and be critical,” replies Mr. Mailloux. And remember, “when we are promised rates of return that are too good to be true, they may be too good to be true. »

This does not prevent Mr. Mailloux from being optimistic about the impact of financial robots on the work of professionals. “Financial services advisors are not going away with the advent of robots,” he says. They will improve thanks to them. »

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