Automated financial advice service causes RBS job losses
RBS announces job cuts as it invests in automated services designed to give online financial advice
Automated financial advice service, dubbed robo-advice, has led to job losses for the Royal Bank of Scotland (RBS).
The bank announced it would be cutting 220 of its face-to-face adviser roles in a bid to cater to increasingly digital customers.
A NatWest and RBS spokesperson said: “We want to help as many customers as possible invest their money in the right way for them. The demand for face-to-face investment advice is changing. Our customers increasingly want to bank with us using digital technology.
“As a result, we are scaling back our face-to-face advisers and significantly investing in an online investing platform to help customers with as little as £500 to invest.”
The firm will also be cutting 250 jobs in investment advice as a result of a decline in customers wanting face-to-face advice on products such as pensions.
Around 80 administration roles will also take the hit as a result of money-saving tactics by the bank. It claimed in its 2015 financial reports to have saved £2bn for the business in the past two years.
The bank is working on finding ways to provide these services in a more digital format. This includes online forms, which assess individuals needs based on information they provide through website forms.
It was predicted at the end of 2015 that robo-advice services would make headway in Europe after successful applications of the technology in the US.
Robo-advice services, such as automated advice models, can give customers guidelines on what products best fit them. The services were recently recommended by the Financial Conduct Authority (FCA) as a way of saving money.
In the March 2016 Financial Advice Market Review by HM Treasury and the FCA, it was suggested that the FCA should invest more in its Project Innovate to “establish an advice unit to help firms develop their automated advice models”.
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The report stated these services will have a positive effect on the market because of cost efficiency and promotion of innovation.
Financial services providers are constantly trying to innovate to keep up with fast-paced financial technology (fintech) startups and supply customers with digital products.
RBS has been investing in innovative technology over the past two years, including allowing users to log into online banking using the AppleID fingerprint scanners and investing in distributed ledger technology Blockchain.