Ross Gallagher of 11:FS wishes banks were rewarded for helping customers build better financial futures, arguing their business models can be misaligned with customer outcomes.
Benjamin Ensor warns that organised crime is using AI for scams and impersonation, with large companies and banks tricked out of millions of euros.
Kate Moody says customers may not understand AI's downsides, and that the biggest positive changes like open banking came from joined-up regulator and government action.
Fintech Leaders Wish for Aligned Incentives and Safer AI Advice
Financial services still rewards firms for the wrong things, and AI raises the stakes. Business models, cautious advice rules and cultural silence about money keep customers from help. Generative AI could supply affordable advice, yet it is largely unregulated and already used by criminals. The guests see the fixes in aligned incentives and coordinated regulation.
Takeaways
Bank business models can work against customers. Ross Gallagher says fintech improved outcomes, but institutions' models evolved slowly and can be misaligned with good customer outcomes. Return and P and L thinking skews how banks engage customers, and he argues for valuing relationships over a longer horizon.
Industry caution leaves investing looking like gambling. Ross blames a zero risk approach to the advice guidance boundary for keeping firms from helping customers. He says standard small print on investment adverts places investing alongside gambling and crypto, and the industry has accepted that customers do not care about pensions.
Generative AI could close the advice gap. Benjamin Ensor predicts generative and conversational AI will solve the lack of affordable personalised advice for mainstream consumers. He compares it to nuclear fission, capable of great good and great harm, and says it will not fix the cost of living crisis.
Criminals are already using AI against customers. Benjamin says organised crime uses AI for scams and impersonation. He cites a report that 8m people using a VPN through a broker had everything they entered into AI intercepted and sold, and says large companies and banks have lost millions of euros.
AI financial advice sits largely outside regulation. Anyone can publish financial advice online, and regulators' remit does not cover individuals or non-financial firms such as Meta. Ross says AI has almost no regulation, and DeepMind's early safety coalition never got going amid the race to win AI.
Awkwardness about money keeps people facing it alone. Kate Moody says interviewees in 11:FS research often look relieved at the end, as if after therapy. Cultural reluctance to discuss money sustains pay discrepancy and achievement gaps, and people need somewhere to take hard decisions, as in healthcare.
Big shifts come from joined-up public action. Kate says the biggest positive changes, open banking in the UK and PIX in Brazil, came from joined-up action by regulators and government, which a single bank or fintech finds hard to take alone.
Closing wishes and forecasts
Ross predicts that in two or five years people may use their own chatbot agents rather than a firm's digital channels, and asks whose behalf an agent acts on and whose outcomes it prioritises.
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On this episode 4
Show 1
Benjamin wishes that financial advice given by AI from non-financial firms required regulation, and that the ISO 20022 standard were universally adopted, since better API and data standards would save companies much work.
Kate adds wishes for lower household spending and less boring pensions.
Asked which wish is closest by episode 1,200, Benjamin picks Ross's wish about rewarding banks, Ross points to a mindset shift towards customer outcomes, and Kate picks AI because it is changing fastest.