Robo-advisors are a term most FinTech enthusiasts will come by at some point during their career, as this concept takes the idea of financial advice to a whole new level. Especially millennials seem to be keen on robo-advisors for the time being, but the true potential of this concept is waiting to be unlocked.
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What Makes Robo-advisors So Appealing?
To explain what robo-advisors do, it is important to keep in mind this concept is entirely based on artificial intelligence. Do not be mistaken in envisioning disembodied heads floating around in space, though, as this approach is purely based on algorithms and computer code. The reason why companies in the FinTech world would refer to this as artificial intelligence is because users would receive financial advice from what appears to be a human.
Most consumers may have an issue trusting an automated service which provides financial advice, as it gathers a lot of data and tries to offer a solution to suit individual user needs. Moreover, there may be some concerns as to which data it uses to provide financial advice in the first place, and whether or not product placement can become part of robo-advisors in the future.
Considering how robo-advisors are designed to offer a wide variety of financial advice, there is a lot of work to be done by FinTech entrepreneurs and startups. Services may range from investment advice to mortgages and which credit card to choose, which makes these robo-advisors a valuable addition to the world of advisors in the future.
Millennials seem to be in favor of robo-advisors already, as they have an issue with dealing with banks. Ever since the financial crisis hit, a lot of people have lost their faith in established financial institutions, yet the questions regarding financial services remain unanswered. Robo-advisors will take over this job segment slowly but surely in the years to come, assuming FinTech companies can build an unbiased and safe product.
Various companies are already exploring the boundaries of what a robo-advisor can do, and how they will behave. The addition of some form of artificial intelligence will allow computer algorithms to learn and evolve over time. And FinTech startups will have a blast creating new robo-advisor solutions. But only time will tell if the general public will trust these services enough.
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