The robots will control your personal wealth. Are you ready?

algorithm. Today, any medium-sized bank branch can have three or four asset managers assigned. And banks like ICICI have nearly 4,450 branches in India. This obviously does not include the exclusive property management branch. So it is the magnitude of change that robo-consultants will bring, given the number of banks and their affiliates. So why is this important? The answer lies in the question! Do you think 2003 is the best time to launch Ola’s service? Can not! Taxi service exists even before Ola. But what has led to the cabin revolution is an ecosystem (or crossover of many factors) based on the smartphone revolution, 3G data penetration, payment mechanisms (such as Paytm) and Google Maps. The introduction of technologies such as large data, analysis, machine learning and automation has led to the robo consulting movement. In addition, for consulting firms to enter the market, an active ecosystem is growing. This service is available to consumers. Here are some factors: Increasing online transaction rates allows consumers to leave more fingerprints, helping businesses understand users more easily. , and create a better online experience. their personality. their appetite for risk. Financial data on consumers has become popular. In addition, many of the consumer financial footprint left over through online transactions allows the referral tools to evolve and meet custom requirements. Artificial Intelligence (AI) has arrived. However, we are talking here about the consumption of robo advice. Historically, asset managers have served the HNIs with the most basic form of data analysis. Now, startup companies are leveraging the power of AI to penetrate the financial pyramid (that is, the population of the nation’s banks). India ready? In the US market, financial giants such as Charles Schwab Corporation and Vanguard are successfully applying robo consulting for their operations. In addition, companies like Personal Capital, SigFig, Motif Investing, Financial Guard, Trizic, Folio Investing and FutureAdvisor (acquired by BlackRock) are all in the early stages. Financial majors such as Wells Fargo, Bank of America – Merrill Lynch and Fidelity Investments have discussed or announced financial advisory services. In fact, regarding a robo-board conversation at the DealBook 2015 conference, James Gorman, CEO of Morgan Stanley, was quoted saying that if we build or buy, we should have it. . p> But with India having the lowest investment rate of mutual funds (seven percent), and the mutual funds of individual investors (including the HNI and retailers), do How to interfere with robot technology consultation will bring about change in Ecosystem? Perhaps, Ishaan Gupta, who runs a digital investment management platform “Wixifi”, has the answer for that. The 32-year-old entrepreneur told us: Robot consulting as a segment becomes a product that will be provided by the litigants (or banks and organizations). great finance). As a result, robo-conseil companies will become service providers for these large financial institutions. He stated this because the field was a capital intensive activity. Therefore, companies that already have a large number of potential customers will have the advantage, by applying technology and providing it as a service. He also stated that the next few days would be very interesting for the industry, with banks accepting this as a service. Banks no longer want to invest their labor and capital to get each customer. They become selective for individuals with higher incomes and more income to invest. Obviously, they want more money. For them, the rest of the population can switch to automated counseling or robotics. On the other side, Amit Mehendale, co-founder and co-founder of robobanking robobanking platform, tells us about the current state of the industry. He says there are currently two decisive models in the segment – regular plans and direct plans. In a regular plan, the commission (or market) platform receives commissions from the distributor (from the mutual fund) for each investment made. This leads to a perceived bias in the market. In case of direct recording,Investments in the future will be based on algorithms and patterns charted by robot. Emerging as one of the hot sectors in fintech, robo-advisory can come across as the next big disruption in the space.According to videosix Research, there are close to 50 Indian early-stage startups flocking around this sector. A Deloitte research paper states that the top 11 firms in this segment globally have seen explosive growth since market entry, .Robo-advisory leverages client information through algorithms, automating and recommending tailored investments to individuals.So, would robots be taking over? Precisely!In a normal scenario, when a customer walks into a financial institution ready to invest in mutual funds, a wealth manager explains about an investment breakup based on market signals.This wealth manager is what robo-advisory is disrupting. Robo-advisors will provide you with the breakup while basing their recommendations based on multiple backend final consumer or the direct investors pay a flat fee to the advisory platform. However, users make investments by themselves, not paying the platform for any execution. At present, according to Amit, 90 percent of the market seems to be dominated by the former players (pursuing the regular plan). However, he claims that the dynamics will change in the next two years, with both plans having equal market share. Eventually, direct plans will start dominating the market. He adds: Todayare users are smart to assess the value of a certain service. No longer does the market pay for execution, but rather on the value and quality of the advice provided.  A classic example was the broking field where the commission of the brokers fell drastically since 1995. Further, with better regulatory framework like eKYC, executions will become even simpler in the future.Ishaan says that the regulators are pushing for fee-only or direct model. With newer developments, SEBI is asking firms to disclose the amounts they have been receiving from mutual funds, in order to cut the bias in the ecosystem. This could be good news particularly for the robo-advisory segment.But, what about the trust? Ishaanare answer to it is fairly simple. He believes that once adoption starts for financial institutions, which already have established trust amongst its customers, people will start adopting the technology.However, the current models offered by startups do involve some personal or telephonic intervention to give users the required confidence. (Graphic by- Aditya Ranade)Adoption of the robo-advisory services The bigger players have already marked the foray in this space.In September last year, ICICI Securities (ICICIare wealth management cell) announced the launch of “Track Actn’, a robo-advisory platform built to provide financial tracking and planning advisory for investors.At present, the bank claims that the platform only gives advice and helps clients with their investing decisions. Clients are required to put the transactions themselves. While getting encouraging feedback from the users, moving forward, they expect more clients to patronise the platform.Speaking to videosix, Abhishake Mathur, Head Investment Advisory Services, ICICI Securities Ltd, said: With the advances in technology, availability of more computing power and modern theories and practices in investing, we expect more and more firms to use technology to advise their clients and use interfaces where clients can take investing decisions easily.He added:The way this technology will evolve depends on clientsn’ experience. The experience will be derived not just from the ease of usage, but also through the depth and suitability of advice.  Robo-advisory has the capability to take away the biases move to a more structured and rational investment process.While having immense potential, Abhishake believes that robo-advisors will need to collect and process more information about the clients to really understand their situation. They will need to have robust methodologies and capabilities to incorporate all the information that they collect.This is in contrast to a relationship manager or advisor who may effortlessly pick structured and unstructured information during client conversations and use it as an input while making an investment plan. Besides technology, there is also a dependence on products available. Exchange Traded Fund’s for example are particularly suited for a robo-advisory framework.While, veteran in the fintech space and Managing Partner at Prime Venture Partners, Sanjay Swamy believes that in the next two to four years, we can expect the following major developments with respect to this technology,Several customer service operations will be managed by robo-advisors – the hor

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