The Advent of Robo-Advisors in FinTech

Banking CIO Outlook | Thursday, July 25, 2019

Robo-advisors will potentially revolutionize financial operations, leading to enhanced strategies and asset management, and consequently, better outcomes.

FREMONT, CA: The emergence of robo-advisors in FinTech has enabled financial organizations to enhance their financial analysis and automate their processes, including asset management, investments, and insurance claims processing. It is eliminating the need for consultations with financial advisors and planners. Robo-advisors are not only cost-effective but offer more accurate analyses when performing financial operations.

Organizations can leverage robo-advisors to automate customer onboarding and streamline the collection of crucial data, including personal information, investment goals, and experience in wealth management through detailed questionnaires. The robo-advisors with built-in deep learning capabilities can analyze the vast troves of data in a matter of minutes, including the evaluation of finances, risk tolerance, and investment strategies, to produce accurate analytics and aid organizations in maximizing their gains. Robo-advisors can also be leveraged to offer critical wealth management advice and suggest investment strategies and services for customers.

Robo-advisors can enable financial organizations to optimize their asset allocation by helping them in adopting the best investment strategies based on a user’s risk tolerance. Predefine algorithms and models are leveraged by robo-advisors to determine the type of asset allocation based on portfolio risk.

The estimation and prediction of portfolio balancing outcomes are possible by utilizing the capabilities of robo-advisors. They can analyze the investment strategies and risks to perceive the impact on the personal finances of the customers. Robo-advisors can offer a better understanding by presenting balance curves based on mathematical function development or static growth to customers. It can also aid the users to compare multiple investment strategies and determine the most suitable ones, enabling them to utilize a data-driven approach towards wealth management.

The selection of the perfect investment policy and the filing of insurance claims can be a daunting task. Also, the processing of insurance claims not only requires multiple documents but is a time consuming and tedious task. However, the use of robo-advisors can help financial organizations in simplifying their insurance process. It enables them to collect relevant data and draw valuable insights which can be used to suggest personalized insurance policies to the customers.

The incorporation of modern technology such as artificial intelligence (AI), machine learning (ML), and blockchain is changing the landscape of finance. It will not be long before robo-advisors, and similar technology will be deployed in every financial organization across the world.

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