Robo advisors have been around for a decade and in their short time, they have made a lasting mark on the financial, investment and Artificial Intelligence world. Robo-advisors are representations of the implementation of algorithm-based decision making and data analysis. When it comes to financial services, consumers are looking for low priced, transparent web-based experiences and the global robo advisory market has what it takes to satisfy consumer needs.

Robo-advisors offer a plethora of financial advisory services such as automated investment, payment advice, loan advice, portfolio management and much more. They have forced financial service providers to re-evaluate the design of their services and make it convenient and exciting for the customers.

The union of robo advisory with banking

Banks are no longer inflexible and rigid in their ways, as they once used to be. They have changed and are in support of digitization and automation. For example, SigFig, a wealth management technology provider in association with Citizens Bank announced the launching of a digital advice solution for all its customers. Customers demand platformafication, which means that they do not want to leave their primary bank when it comes to investments and prefer to receive investment and banking services from a single platform. Robo-advisors are able to provide account support to thousands of customers, just before they have enough assets to avail for full-service advice. Robo-advisors are all set to become multi-faceted wealth management engines based on data analytics, machine learning, data mining, and language processing.

Robo advisors compensate for the loss of human touch

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Global Robo-Advisory Market (2018-2023)
November 2018 | 90-100 Pages | SKU: 201821

Based on a MyPrivateBanking survey, millennials are cozying up to robo-advisors as long as there is some element of human interaction present. When it comes to robotics, having a human backup comes in handy while managing unexpected occurrences. Many financial companies and institutions are trying to incorporate the human touch into algorithmic interactions, and allow account holders to interact with human financial advisors apart from the standard automated portfolio management services.  Personalization is the key for companies to unlock crucial customer satisfaction and loyalty while boosting transactions and sales.

It has become cheaper for financial institutions and customers to deliver and receive financial advice through automated devices. Costs are saved on several fronts. There is no need to employ financial advisors, accountants and lawyers, as all their functions can be performed by robo-advisors. Despite the initial costs of investment, the company benefits from economies of scale. Financial institutions are able to get in touch with and attract potential clients easier if they are able to provide financial advice through automated tools.

Automated tools will enhance the quality of the service provided as it removes the probability of differences due to human interpretation and delivers a standardized form of customer experience. Large quantities of data can be easily processed on a real-time and ongoing basis. Financial institutions can be easily audited because automated tools are easier to interrogate, owing to their highly predictable and consistent performance and way of working, unlike the performance and decisions of human beings. 

Robo advisors have acted as game changers in the world of investment and finance and is removing the barriers that once existed so that anyone can invest with a high chance of success.