Implementing a robo advisor strategy

Implementing a robo advisor strategy starts with these critical decisions.

Banks of all sizes are waking up to the dramatic growth of robo advisors, with industry leaders aggressively rolling out their own offerings. However, smaller to midsized banks can also get into the game. They can’t afford to ignore what’s arguably an inexorable digital asset management trend.

Robo advisors can complement—not threaten—any bank’s business model and improve customer engagement. According to KPMG’s report, Robo Advising: Catching Up and Getting Ahead, all types of bank customers—including millennials—are interested in a digital investment experience. Regardless of age, income, or gender, 75% of bank customers surveyed by KPMG said they would be likely or somewhat likely to consider a robo advice service from their bank.

Once a bank decides to embrace robo technology, it must decide whether to build, buy, or rent the technology. It’s paramount for a bank to get this right, even for one that partners with a third party to deliver its investment program. A misstep could negatively impact technology budgets, IT development priorities, staff time, and a bank’s reputation. However, choosing the right path could yield a robo advisor that serves customers and cultivates relationships for years to come.


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