Are Robotic Advisors Making Human Counterparts Obsolete?

Are robots coming for your job? Not yet, says Credit Suisse's Marco Abele.

Depending on one’s perspective, technology will, or in some cases has, caught up with humans in terms of execution and job performance. In the realm of financial services this is especially relevant, given the deployment of algorithmic trading tools and research in artificial intelligence (AI).

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Across many other sectors such as manufacturing, machines have replaced humans en masse, circumventing mounting labor costs. In the financial services realm, financial advisors have faced the same scrutiny, begging the question – will they be replaced by new digital tools or robotic-advisors?

Credit Suisse’s Senior Executive Marco Abele does not see much risk for human financial advisors going extinct. Rather, he sees the advent of technology as playing a complementary role to financial advisors – however he does not rule out robo-advisors eventually redefining the field.

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Mr. Abele presently serves as Credit Suisse’s Head of Digital & Private Banking. According to a recent Q&A conducted in-house, the propensity of digital and analogue are not binary in nature and new technology will serve as a benefit to existing financial advisors, supporting a variety of tedious and more time-intensive tasks, which should in theory free up more time for clients.

Marco Abele

This phenomenon is already on display at Credit Suisse, following the deployment of new technology earlier this year – in this instance tablets with speech recognition effectively overtook all documentation tasks, freeing up staffers to focus on clients. More broadly speaking however, Mr. Abele does not see grounds for panic setting in amongst financial advisers, nor does he believe humans will be replaced by robots in the near future.

For all the talk of the industry and technology reaching a key inflection point, independent robo-advisors presently manage around $20 million worldwide, a number that is expected to climb to $450 million by 2020 – this figure pales in comparison to assets under human management, which is in the trillions.

According to Mr. Abele: “The generation of today’s 15- to 35-year-olds seeks out the offer that suits them best. Whether that offer comes from a 160-year-old bank or a social network is completely irrelevant. We have to offer the best solution or they will go somewhere else.”

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