The need to nurture and amplify the human advantage in an AI-flattened industry

The artificial intelligence (AI) singularity, the idea that technology is evolving to an irreversible, unmanageable level, makes the financial service industry smarter in many ways, with faster decision-making, greater efficiency and improved fraud detection and compliance.      

In this simple frame, it is easy to concentrate on two spaces: what AI does better than humans and what AI and humans do better together. But there is a critical third space, the space where humans do what AI cannot. If this space is forgotten, the result will be a flattened industry, with businesses indistinguishable from one another.      

This critical third space is where differentiation and innovation are held, client trust and connection are built, and fees justified. The first two spaces are necessary, but without the third space, they are not enough.

AI-led uniformity

Overreliance on AI risks the world losing its ‘human spark’. This is already evident in language. From corporate emails to academic essays, a negative-to-positive sentence structure, buzzwords like ‘delve’ and ‘robust’, and the often-meaningless lists of three are dominating writing. 

Although these linguistic techniques were once thought to be particularly powerful, they are now devoid of original voice, other than that of ChatGPT. 

The human advantage in an AI- driven world is deep-rooted in how our brains are wired, the irrationalities that are built into how we think, the significance of social power and human contagion, and the fact that context is king.      

These unique human qualities need to be thought of strategically, nurtured, and given salience, as they will ultimately justify and differentiate what is being delivered and the value offered beyond a simply smarter, more efficient AI eco-system. What behavioural science has taught us is that context is paramount, and relationships are built on understanding contextual nuance and adapting to these nuances. Humans beat AI every time in doing this, reading the context, reading the rooms, reading the invisible signs – AI does not. 

The behavioural science concept of loss aversion shows that the pain of losing is particularly stark compared to the joy of winning. Humans tend to fight twice as hard to avoid a loss as they would to win a gain. This is a simple bias and one we need to recognise within their companies and clients.      

AI can, without doubt, recognise the pattern of the bias, but it cannot experience the emotion, the fear, or the impulse that goes with it, nor can it do this in real time;      humans can. Humans can absorb, reframe, and counter emotional responses in the moment, elevating advice into immediate behavioural intervention or even therapy, and clients will pay for this.      

The power of human irrationality

A logical, rational approach assumes that a correct human judgement will inevitably follow the presentation of data or information, but human judgement is neither rational nor logical. 

There are many ways to frame information, and different frames create different outcomes. Decisions are constructed, not calculated. A negative frame, such as a 20% downside risk, is the same as an 80% chance of success, but behaviourally, a ‘loss vs gain’ frame will trigger different reactions. 

AI can easily create different frames, but what it cannot do is make them contextually sensitive. It cannot feel how a particular frame will land with a client. The frame an adviser chooses should be uniquely guided by their client’s understanding, past experiences, ethics, and current contextual circumstances and nuances. This is where the value of experience and built relationships is given salience.

Finally, there is the very human space of trust. Research confirms that we trust warmth and connection over clinical competence. In most financial decisions, there is always a level of uncertainty, and this is where human trust comes in and where AI has a structural limitation.      

What AI cannot deliver is a sense of personal accountability, shared risk, and human presence; relationship signals that cannot be easily automated. The high stakes that a client experiences are not felt nearly as starkly by an AI agent as they would by a human counterpart. In cross-border trade finance, there are often highly volatile regional variables and risks that require trust – a human-driven concept that in a post-truth world, where AI hallucinates, gains even more currency in decision-making. Humans take responsibility – AI does not. Therefore, trust, the biggest driver of client retention and fees justification, will remain the biggest human advantage. 

On a slightly lateral point, humans also love to look sideways for social proof. They turn to peers and perceived authorities, observing what others are doing. This is deeply embedded in human survival psychology, and, once again, AI cannot participate in this space, as influence comes from people who stand behind a decision, and not the decision itself.

The trade finance industry is rightly embracing the power of AI; thinking strategically about what AI can do better and what AI and humans can do better together. 

The problem is, jumping on this technological bandwagon risks the industry forgetting what humans do better than AI. Automating advice, removing human understanding, interaction, and optimising for efficiency all reduce operating costs, but also flatten differentiation and lead to a downward price spiral.  

In order to avoid this, the industry must think strategically about how to spotlight human differences, to protect and nurture them alongside AI adoption. 

Forgetting to do so can undermine the very values clients seek and pay for. Firms that compete on data points will compete on price. Firms that understand and give salience to human behaviour will compete on value.

To scientifically define the human capital you need to build, protect, and amplify around three key business needs: trust, growth, and value.