Questioning the ability of feature-based explanations to empower non-experts in robo-advised financial decision-making

Robo-advisors are democratizing access to life-insurance by enabling fully online underwriting. In Europe, financial legislation requires that the reasons for recommending a life insurance plan be explained according to the characteristics of the client, in order to empower the client to make a "fully informed decision". In this study conducted in France, we seek to understand whether legal requirements for feature-based explanations actually help users in their decision-making. We conduct a qualitative study to characterize the explainability needs formulated by non-expert users and by regulators expert in customer protection. We then run a large-scale quantitative study using Robex, a simplified robo-advisor built using ecological interface design that delivers recommendations with explanations in different hybrid textual and visual formats: either "dialogic"- more textual - or "graphical"- more visual. We find that providing feature-based explanations does not improve appropriate reliance or understanding compared to not providing any explanation. In addition, dialogic explanations increase users' trust in the recommendations of the robo-advisor, sometimes to the users' detriment. This real-world scenario illustrates how XAI can address information asymmetry in complex areas such as finance. This work has implications for other critical, AI-based recommender systems, where the General Data Protection Regulation (GDPR) may require similar provisions for feature-based explanations.