Could AI save the world… or at least save us 12 minutes?
The UK Government wants to force consumers to read a credit agreement (you know those long dull documents you *should* read before taking out a loan or credit card but don’t) each and every time they use Buy Now Pay Later (BNPL).
These agreements are nearly 50 years old and have little value in helping consumers understand the products they want to use – just look at the research.
They also take ages to read (that’s if anyone actually reads them).
The average adult reads 238 words a minute, so it will take 12 minutes (give or take) to read a typical 3,000 word Consumer Credit Agreement (most of which is not even relevant to BNPL products given they are interest free – but that’s for another time).
That’s 12 precious minutes reading something which, while important, is hardly Shakespeare (and what’s worse is even after spending 12 minutes reading these things, no one remembers the important details anyway).
Wouldn’t it be better to have that 12 minutes back to do something (anything) more fun, engaging or fulfilling?
Could AI hold the answer?
As AI is being lined up to solve world hunger, climate change and many other laudable big world issues, I wonder if it could also save humanity from the chore of reading credit agreements. I admit this issue is not as pressing as ending world poverty but it would be nice to have those 12 minutes back. Could AI give us the gift of time itself?
Enter AI chatbots.
Imagine a world where a consumer (you and me) can engage in real-time conversations with a tool that can serve up tailored answers specific to the credit product they’re looking to use, apply for or purchase with. These chatbots, which would be embedded within the application / purchase journey for a product, can explain key terms, offer personalised examples, and even simulate various scenarios to help consumers make informed decisions.
Chatbots are not new. Businesses have been using them for many years as ways to communicate with and inform their consumers. What’s changed is their capability (and popularity) thanks primarily to the rapid ascent of OpenAI’s ChatGPT and similar GenAI models.
So how could an AI chatbot help a consumer navigate through key credit product information and, most importantly, understand it?
In this context, think of a chatbot as a digital companion which is holding your hand throughout the process of signing up for or applying for credit. Through its use of natural language processing and machine learning algorithms, chatbots can serve up the need to know information so a consumer can make an informed decision. By being intuitive and user-friendly, they eliminate the need for consumers to decipher convoluted legal language inherent in credit agreements, ensuring that important information is both accessible and comprehensible. We’re already seeing similar use cases for chatbots being used in the world of law.
Reaching chatbot nirvana.
The technology exists for this to happen. The blocker right now is regulation. Lenders will not replace credit agreements with chatbots unless regulators say they can. So to bring about this revolution in credit information disclosure, we need boldness and ambition from our policymakers.
Condensing, refining and simplifying what already exists isn’t going to be good enough. Ending the era of archaic information disclosure is within reach. Chatbots offer a route to deliver key product information to consumers in a way that is personal, user friendly and accessible. They offer a way to bridge the asymmetry of information between the consumer and the provider.
HM Treasury must seize this opportunity for change and work towards a future where consumers are empowered with knowledge and confidence to make informed financial decisions and in turn create a credit landscape that truly puts the consumer first.