My Advisor, Her AI and Me: Evidence from a Field Experiment on Human-AI Collaboration and Investment Decisions

TL;DR

This study shows that human involvement in AI-driven financial advice increases consumer trust and reliance, leading to better welfare outcomes, without compromising advice quality, through a field experiment with a European bank.

Contribution

It provides empirical evidence that human-AI collaboration enhances consumer trust and decision-making in financial advice, highlighting the importance of human oversight in AI services.

Findings

Customers are more likely to follow human-AI advice than pure AI advice.

Human involvement acts as a peripheral cue, increasing the advice's affective appeal.

Increased reliance on human-AI advice leads to higher consumer welfare.

Abstract

Amid ongoing policy and managerial debates on keeping humans in the loop of AI decision-making, we investigate whether human involvement in AI-based service production benefits downstream consumers. Partnering with a large savings bank in Europe, we produced pure AI and human-AI collaborative investment advice, passed it to customers, and examined their advice-taking in a field experiment. On the production side, contrary to concerns that humans might inefficiently override AI output, we find that giving a human banker the final say over AI-generated financial advice does not compromise its quality. More importantly, on the consumption side, customers are more likely to follow investment advice from the human-AI collaboration compared to pure AI, especially when facing riskier decisions. In our setting, this increased reliance leads to higher material welfare for consumers. Additional analyses from the field experiment and an online experiment show that the persuasive power of human-AI advice cannot be explained by consumers' beliefs about enhanced advice quality due to human-AI complementarities. Instead, the benefit stems from human involvement acting as a peripheral cue that increases the advice's affective appeal. Our findings suggest that regulations and guidelines should adopt a consumer-centered approach by fostering service environments in which humans and AI systems can collaborate to improve consumer outcomes. These insights are relevant for managers designing AI-based services and for policymakers advocating for human oversight in AI systems.