Large banks afraid of competition from financial Robo-advisors

Large traditional investment banks, like Morgan Stanley, Bank of America and Wells Fargo are under great pressure due to competition from financial Robo-advisors. In such a situation it becomes difficult to justify their fees, far exceeding the costs of services from cheaper investment platforms.

This opinion was expressed by Kendra Thompson, managing director of Accenture, reports Bloomberg.

In her opinion, the above-mentioned banks, which employ about 46 thousand financial advisors, have to respond fintech startups that offer new financial instruments based on the artificial intelligence technology.

Robo-advisers that use analytical programs to assess situations, usually take less than half the fees of traditional banks, which ask for a minimum of 1% of assets under management. Thus, according to Kearney, Robo-advisers by 2020 will manage the assets in the amount of 2.2 trillion US dollars.

According to Jay Welker, President of private banking at Wells Fargo, customers want everything at once, both technology and human communication.

Source: banks.eu advapay.eu