“In the future all companies will be IT companies” was the throwaway line from a keynote speaker at an Amazon conference I attended.
Will “people businesses” like financial advice become IT businesses? Can a robot do a better job?
Firstly, the current financial advice process is slow and expensive.
It can take months from an initial consultation before a client receives their statement of advice. This can be a laborious 50 page document, costing around $3,000 (before investment, implementation and other costs).
Here a Robot should win. They can respond, sort, research, trend, display, calculate, project and make a recommendation instantly and at very low cost.
Secondly, an adviser establishes an emotional connection with a client.
This is where an adviser has an advantage, but for how long? Things are changing in “Robot World”. Developers can program a robot voice to make it more engaging (known as prosody). Robots can also recognise and interpret facial expression, body pose and voice, and respond accordingly. Kate Darling researches human-robot interaction and found our tendency to project human traits and behaviours onto non-humans results in us developing emotional connections with robots.
Thirdly, trust is an essential ingredient in giving advice.
A report from Oracle (Money and Machines: 2021 Global Study) reveals that the majority of 9,000 respondents believed consumers trust machines more than human advisers to help manage their personal finances. Eighty-two per cent of respondents predicted that robots will replace financial advisers by 2026.
Maybe advisers in the future will be digital?