Let's define ROBO. artificial intelligence (ai) ROBO is the creation of intelligent machines that work and react like humans. It's computer science that incorporates knowledge, reasoning, problem solving, perception, learning and the ability to manipulate. Computers can only act or react like humans if they have an abundance of information relating to the world.
Let’s talk robo advice, an expression with serious limitations that divides opinion and has driven a fair amount of unchecked hype (and some fear) within the finance industry, often by people with a barrow to push.
First off, I don’t like the term ‘robo’ advice.
This is simply because it implies some form of robotic artificial intelligence to act and react like humans, funnelling consumers through electronic channels and reducing their financial requirements to an algorithmic equation to match a product, not the complex, emotional needs of a human being. It implies processing, being code for business efficiency, in turn meaning high volume/ low cost.
Stand back from the hype surrounding so-called ‘robo’ advice technology and what you’ll see is a FinTech industry debate, pumped up mostly by product vendors, largely ignoring the central issue of what is best for the consumer.
The rush to produce the smartest ‘robo’ system is to me akin to a bunch of software code developers imposing their creations on the financial adviser and clients, not necessarily beginning with consumers best interests and holistic objectives in mind.
In other words, the current industry debate is led largely by vendors or start-up techs extolling the virtues of their IT systems. Despite some of the inherent good it can do, the current level of discussion by the ‘Fintech’ and ‘Regtech’ industry as it relates to ‘robo’ financial advice is way too introspective.
Let’s broaden the debate.
Focus on the tangible things that matter: enabled, high quality financial advice, engaged clients and better client lifestyle outcomes. More Australians getting better advice, a better understanding of financial literacy and living a decent, dignified retirement.
That is why I think the discussion has to shift. To me, the bigger picture is that of 'digital advice automation' aimed at empowering more quality financial advice.
More quality advice equals better outcomes for consumers – with greater financial literacy levels, better tools and improved quality of life goals and lifestyle benefits. Retiring with dignity.
Yes, it is time to shift the debate.
Read more on financial advice automation.