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Automation will play only supporting role in wealth management for some time

Wealth managers know they cannot ignore increasing automation in their sector, but their jobs are safe from robots for the time being

Rich people will demand automated services from their wealth management suppliers, but advisers are not expected to be replaced by robots any time soon, according to research.

Almost half (49.5%) of wealth managers who manage the investments of rich clients expect demand for automated investment services to increase over the next two years, research from analyst company Verdict Financial shows.

But advice to clients is unlikely to be automated or provided by robo-advisers in the near future, according to 87% of wealth managers.

Nicole Douglas, wealth management analyst at Verdict Financial, said: “[Half of] wealth managers believe the demand they currently experience for automated investment services will increase in the next two years, indicating that a noticeable proportion of the market prefers digital platforms in which to carry out investment decisions or seek advice.

“Wealth managers will do well to continue providing personalised advice and embrace digital capabilities as a supporting role.”

In the survey, 67% of wealth managers agreed that investing in automated investment services could complement their existing offering.

But they must act to stay competitive or risk losing customers. The combination of easy access to information and the ability to access a wide spectrum of independent advice online has changed how rich people manage their money.

Read more about IT in the wealth management sector

Technology is not only making it easier for people to find the right advice, it also enables them to keep up to date with their own investments. One banking industry IT expert told Computer Weekly: “Wealth managers’ monopoly on access to market information has gone, so I don’t expect they will last too long.”

The use of customer-facing software robots is now a reality in financial services, with retail banks taking advantage of the technology. For example, SEB in Sweden is the first bank to use IPsoft’s cognitive technology for customer services, and digital bank Atom is offering customer support via machine learning software on its mobile app.

Earlier this year, RBS cut hundreds of jobs after introducing an automated financial advice service. ..........................................................................

Read more on IT for financial services

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