Seven in 10 consumers globally are open to using robo advice for banking, insurance and retirement planning.
Clients around the world welcome the use of automated algorithms and computer advice for their financial needs but still seek human interaction for more complex financial decisions, a recent report from Accenture found.
The consulting firm also found that consumers are open to non-traditional financial providers, such as Google, Amazon and Facebook. Nearly two-thirds of those surveyed would switch to one of the tech leaders or even a supermarket or retailer for banking, insurance and financial advice. Robo advice is the term used for wealth management services that are automated by computer algorithms, often based on individual questionnaires.
Among younger consumers, only 41 per cent would switch to Google, Amazon or Facebook, “indicating that many younger consumers see value in traditional financial institutions,” the report stated.
The findings are a bit troublesome for banks, said Alan McIntyre, senior managing director and head of Accenture Banking.
“The vast majority of today’s consumers view their bank relationships as entirely transactional; in order to gain customer loyalty, banks have to be more assertive in using technology to provide tailored, personalized offerings when, where and how customers want them,” he said.
The Distribution and Marketing Consumer research found that 71 per cent of those surveyed are open to using robo advice to determine which bank account to open, while 74 per cent would use the service to decide which insurance coverage to purchase, and 68 per cent said they would use automation to plan for retirement. About 78 per cent of those surveyed said they would use robo advising for traditional investing, which is what the technology is normally used for.
The survey of 33,000 consumers in 18 countries and regions found that two-thirds would still prefer a human interaction for things like complaints and complex financial products such as mortgages.
Emerging markets have the largest appetite for robo advice, with clients more open to the technology in Indonesia (92 per cent), Thailand (90 per cent), Brazil (86 per cent) and Chile (84 per cent). Demand was still high in the countries that were less accepting of robo advice: Canada (56 per cent), Germany (59 per cent) and Australia (61 per cent).
Consumers are also willing to share data with financial service providers in exchange for faster and less expensive services, with 67 per cent willing to give their bank more personal data. Of those, 63 per cent would expect better services in exchange for data.