Artificial Intelligence is changing the way consumers make decisions.
Only a few years ago, customers researching financial products were likely to visit comparison websites, read online reviews or speak directly to a business before making a decision.
Today, many are turning to AI.
Recent FCA research found that younger consumers increasingly trust AI when making financial decisions, often placing greater confidence in AI-generated information than advice from television personalities or social media influencers. While the research focused on investing, the implications extend far beyond investment products.
Consumer credit firms should be paying attention.
Customers are researching differently
Whether someone is considering a personal loan, credit card or motor finance agreement, AI tools are becoming part of the research process.
Consumers are asking questions such as:
- Which lender is best?
- Can I afford this loan?
- Is this interest rate competitive?
- Should I consolidate my borrowing?
- What happens if I miss a payment?
The answers they receive may not come directly from the lender.
Instead, they may come from an AI platform drawing on publicly available information, website content and third-party sources.
For firms, that changes an important dynamic. You no longer have complete control over how your products are explained.
Customer understanding is becoming more complex
Consumer Duty requires firms to support customer understanding.
Historically, this focused on the communications produced by the business itself.
Increasingly, however, firms should recognise that customers may arrive having already formed opinions based on AI-generated responses.
Those responses may be accurate. They may be incomplete. Or they may oversimplify complex lending products.
This does not remove a firm’s regulatory responsibilities, but it does make customer understanding significantly more challenging.
It raises an important question.
How do firms ensure customers understand their products when customers are increasingly relying on information they do not control?
Clear communications matter more than ever
One practical implication is that firms should review how their own content is written.
AI systems learn from publicly available information.
Clear, balanced and well-structured website content is therefore becoming increasingly important, not only for customers reading it directly, but also because it may influence how AI tools describe products and services.
This creates another reason to ensure financial promotions, FAQs, customer guidance and product information are accurate, consistent and easy to understand.
Good communications now have a much wider audience than originally intended.
Governance must keep pace
Boards should also begin considering AI-driven customer behaviour as part of wider governance discussions.
Questions worth asking include:
- Are customers relying on AI before engaging with us?
- Does our public content accurately reflect our products?
- Are complaints revealing misunderstandings influenced by third-party information?
- Have we considered how AI may change customer expectations?
These are not technology questions.
They are governance questions.
Like many emerging risks, they should be understood before they become regulatory issues.
Looking ahead
The FCA’s research is unlikely to be the last time AI and consumer behaviour appear on the regulatory agenda.
As AI becomes more sophisticated and widely used, firms should expect increasing interest in how technology influences customer understanding and decision-making.
Consumer Duty has always been about delivering good customer outcomes.
The challenge is that customer journeys are evolving more quickly than ever before.
The ALPH Perspective
At ALPH Legal & Compliance, we believe firms should view AI not only as an operational opportunity but also as a governance challenge.
The organisations best prepared for the future will not simply monitor regulatory developments. They will continually assess how changing consumer behaviours influence customer journeys, communications and governance.
As AI becomes an increasingly common source of financial information, firms that invest in clear communications, robust governance and ongoing oversight will be better placed to maintain customer trust, demonstrate good outcomes and respond confidently to future regulatory expectations.