HSBC Jumps on the Robo-Advisor Bandwagon

The international bank has recently announced its own version of an automated algorithm advisory system.

HSBC, the international bank headquartered in London, has announced its own robo-advisor development. The automated algorithm is designed to give personalized advice and recommendations based on an individual client’s financial situation. The service, which is planned to be launched by the end of 2017, will make wealth management available to customers with smaller funds to invest.

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HSBC has been developing its robo-advisor service during the past year or so, and has tested it with anonymized information in the fintech sandbox of the Financial Conduct Authority (FCA). Though few details regarding the software have been released, the bank claims that the service will have the favored attributes of advice given via internet, telephone, and face to face mediums.

Raman Bhatia

Raman Bhatia, Head of Digital, UK & Europe, noted: “The way our customers interact with us is changing and we need to ensure that we stay ahead of the curve when it comes to the development of new and exciting technologies. We are very excited by HSBC Online Advice service and have been working with our customers and the FCA to shape our offering to ensure that we are providing the most up-to-date and smart wealth management advice possible.”

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A few weeks ago, HSBC published the results of research conducted with 12,000 consumers. It was revealed that the participants felt more comfortable with the idea of a robot performing an open-heart operation than having one start a savings account or offer mortgage related advice. Bhatia responded: “More customers than ever are using mobile and internet banking with more than 90% of our interactions with customers now done through our digital channels, so it’s the natural next step that investment advice is available online.”

Andy Maguire

HSBC will extend the system into a collaboration of anti-money laundering oriented automated investigations with Ayasdi, an artificial intelligence startup based in Silicon Valley. In a pilot version of the technology provided by Ayasdi, the amount of investigations decreased by 20% despite not lowering the number of cases that were then turned in for further inspection.

In response to Reuters, Andy Maguire, COO of HSBC, commented that Al technology can enhance compliance quality, as it is capable of “[doing] things human beings are not typically good at like high frequency high volume data problems.” Furthermore, it can boost human abilities.

Recently, Finance Magnates covered HSBC Global’s asset management having welcomed three new investment specialists – Sandra Carlisle, Stephanie Maier and Helene Winch – who will report to Melissa McDonald, who is in charge of the bank’s initiatives on sustainability.

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