Seven out of 10 consumers worldwide would welcome robo-advisory services, according to a report by Accenture. The study defines robo-advisory services as those that are computer-generated and independent of human input; such services can be used in banking, insurance, and retirement planning.
Based on responses from nearly 33,000 consumers worldwide, the report found that 71 percent are open to robo-advice for determining which bank accounts to open, 74 percent for which insurance coverage to purchase, and 68 percent for retirement planning. Moreover, 78 percent said that they are open to robo-advice for traditional investing.
Robo-advisory services can run analytics and give recommendations back to the consumer, ultimately proving faster and less expensive than their human counterparts, says Stephanie Sadowski, managing director at Accenture.
Consumers find robo-advisory platforms appealing for several reasons, according to the study. Thirty-nine percent of respondents found the potential for faster service enticing, and 31 percent liked the potential for less expensive service. Moreover, 26 percent said that they believe such services are more impartial and analytical than human advisers.
Nevertheless, 68 percent indicated that they prefer human interaction when dealing with complaints, and 61 percent wanted human service for dealing with complex products such as mortgages. This challenges organizations that might use such technology to develop a combined digital and physical experience for their customers.
“If you think about the technology itself, the technology has existed for years—it’s always been there, the question is just how smart, good, and accurate it’s been,” Sadowski maintains.
Google, Apple, Facebook, and Amazon have already started implementing robo-advisory services into small, easy decisions, such as product recommendations. “People started acting on those, and through that they’ve really gained the confidence and the trust that an analytical engine or robo-adviser can help guide them to a better place than they can get on their own,” Sadowski says. “Once it was prevalent in those spaces, then the question from the consumer starts to become, ‘Why can’t my bank or my insurance company or my wealth management firm do the same thing?’”
Accenture also found that consumers are willing to switch to nontraditional providers for certain services. For example, 38 percent of respondents said they would switch to Google, Amazon, or Facebook for financial advisory services, 31 percent for banking services, and 29 percent for insurance services. Furthermore, 31 percent would consider switching to a supermarket or retailer for their banking needs, and 30 percent for their insurance needs.
Because consumers have trusted companies like Google, Apple, Facebook, and Amazon that employ front-end analytics engines and robo-advice, if financial services firms don’t start providing these same capabilities, “there’s a threat of disintermediation,” Sadowski cautions. When that happens, Google, Facebook and the others could continue to expand their relationships with consumers and relegate banks and insurance companies to just being providers of back-end services, she adds.