The price comparison industry faces a major challenge from AI

New research from the Folk Group shows the growing use by consumers of AI in searching for the best financial deals

The increasing use of AI as a financial advice tool could pose a threat to the business models of price comparison sites, claims new research.

A report from Cardiff-based strategic communications consultancy the Folk Group says that up to 50% of financial services website traffic could be at risk as AI tools begin to replace traditional search-led journeys.

It says that the price comparison model, built on the assumption that consumers arrive via Google search, complete a form, receive a ranked results table and click through to buy, is precisely the journey that AI is beginning to challenge.

Wales is home to some of the biggest players in the price comparison with Moneysupermarket, GoCompare and Confused. The industry was created in Wales with the first website launched by Admiral (Confused) in 2002.

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The AI and the Disruption of Financial Search and Distribution report, identifies early but clear signs of behavioural shift, with 11% of focus group participants already using AI to compare financial services products including insurance, mortgages and bank accounts.

However, price comparison sites remain the principal route for researching and choosing financial products such as car insurance. This is backed up by data from Mintel showing that 67% of UK adults have used a price comparison website to search for insurance policies in the last year.

For AI competitors the report says that regulatory and accuracy hurdles are high with direct price comparison and financial advice highly regulated. General purpose assistants like ChatGPT and Gemini are still prone to “hallucinations” (making up facts) and giving inaccurate or even risky davice on high-stakes financial questions

The report identifies three plausible paths for price comparison websites as AI reshapes consumer journeys:

• They are bypassed as consumers shift to conversational AI interfaces, their traffic thins and market share transfers to whoever owns the AI layer.
• They become the data backbone powering AI agent recommendations, surviving commercially but losing the direct customer relationship that has historically been their greatest asset.
• Price comparison websites moves quickly to build or acquire a regulated AI agent capability and competes for the conversational front door in financial services

Moneysupermarket became the first UK comparison brand to launch a ChatGPT app in February, a signal that at least one Welsh business is already moving toward the third path.

Dan Mines, co-founder of Menna.ai and former head of customer and innovation at Confused.com – which was acquired from Admiral by Uswitch in 2020 – said: “It’s not ‘ask Google’ time anymore, it’s ‘ask ChatGPT or Gemini.’ These tools fundamentally change consumer behaviour in terms of expectations.

“The consumption of the internet is changing; you’ve now got a much more diverse landscape, including AI assistants, social platforms, embedded finance and app-based ecosystems. Anyone whose distribution model was built around the browser-based journey needs to be asking hard questions now.”

Nicolas Weng Kan, former chief of both Confused.com and Google Compare, said: “Price comparison sites still offer a purely price-led vision, but customers don’t buy purely on price. AI can use your history, who you bought from before, to predict what you actually want, not just what’s cheapest. That’s a fundamentally different model.”

Sharon Flaherty, chief executive of the Folk Group and former head of communications at both Confused and Moneysupermarket, said: “Wales built the price comparison industry and it’s a genuine success story. These businesses changed how millions of people shop for financial products and drove a shopping around mentality to get the best deal.

“But what we’re seeing now is a shift that challenges the foundations that this success was built on. The businesses that understand how to navigate it, not just move fast will win. Those that don’t risk being displaced by players who weren’t even in this market five years ago.”