Tech enabling financial advice for all
Ironically, not everybody can afford a financial advisor and they are often in high demand, leading to considerable waiting periods. Fortunately, there’s another option – robo advisors. These online financial assistants can be used to manage stocks, bonds, commodities, real estate, and allocate investments. Just like their human equivalents, they base their decisions on personal information and wider industry knowledge. There are now 75 different services within Europe alone, mainly concentrated in London. One of the most popular and well established robo advisors is Betterment, based in New York.
Despite sounding suspiciously like chatbots, robo advisors aren’t classed as artificially intelligent. Instead, they apply algorithms to asset management. Although the market is relatively modest, financial companies are eagerly building their own digital advisors to complement their existing infrastructures. It doesn’t take an expert to work out why – robo advisors are economic, efficient, and can deal with multiple clients in quick succession. This, of course, will have a detrimental effect on the employment prospects of human financial advisors. For the most part, though, robo advisors are beneficial to anyone in need of guidance, and can help to build better relationships between businesses and their customers.
The application of robo advisors mirrors the use of automated services in various other personal professions such as law. And, whilst they differ from chatbots, they’re part and parcel of increased consumer interaction with conversational interfaces. Robo advisors represent yet another way in which consumers are familiarising themselves with digitalisation, and also show the willingness of incumbent financial organisations to embrace FinTech.