Financial Service Providers, AI, Satisficing, and the Human Touch In the Market for Financial Nudges and Boosts

Behavioural Financial Regulation and Policy (BEFAIRLY) series, Volume III

25 Pages Posted: 18 Mar 2021

See all articles by Hersh Shefrin

Hersh Shefrin

Santa Clara University - Leavey School of Business

Date Written: February 4, 2021

Abstract

Advances in artificial intelligence (AI) are reshaping many facets of the decision landscape faced by consumers and investors. These advances have resulted in lower fees and borrowing costs, increased access to financial services, and greater customization. In this paper, I discuss how the need for the human touch impacts the potential for digital technologies to lower the cost of providing mass customization and personalization to the broad market for wealth management. I present the cases of three financial service firms, to illustrate how the failure to account properly for the human touch can result in unsuccessful technologically-based strategies.

Keywords: robo-adviser, human touch, user design, user interface, artificial intelligence, satisficing, nudges, boosts

JEL Classification: G00, G02, G11

Suggested Citation

Shefrin, Hersh, Financial Service Providers, AI, Satisficing, and the Human Touch In the Market for Financial Nudges and Boosts (February 4, 2021). Behavioural Financial Regulation and Policy (BEFAIRLY) series, Volume III, Available at SSRN: https://ssrn.com/abstract=3779635

Hersh Shefrin (Contact Author)

Santa Clara University - Leavey School of Business ( email )

Dept. of Finance
Santa Clara, CA 95053
United States
408-554-6893 (Phone)
408-554-4029 (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
65
Abstract Views
325
rank
410,302
PlumX Metrics