21 October 2017
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ING tackles robo-advisory conundrum

31 May 2017  |  7042 views  |  1 ING bank branch

Research among 15,000 consumers conducted by ING finds that only two percent would trust a fully automated robo-adviser to invest their money on their behalf.

The results have provoked a fair amount of head-scratching at the Dutch bank, which already uses digital advisers like Coach Epargne, Genoma and Moje ING, to help customers make savings and investment choices.

The survey took in the views of 15,000 people in Europe, the USA and Australia and found that one-third of them want no automated financial activities at all. Only two percent would trust a fully automated robo-adviser and only 26% would opt for robo-advice even if they got final approval on all decisions.

According to Nathalie Spencer, behavioural scientist at ING Group Research, people’s views on this new technology can be explained by a reluctance to give up control.

The survey clearly shows that people will still want to feel they have the final say on investment decisions, she says.

“People have a lot of faith in their own ability to make the best decisions," says Spencer. "It’s up to us now to understand better how we can address that need for control so that people can take advantage of robo-advice’s potential to improve their financial positions.”

Martin Krebs, global head of retail investment product solutions who is coordinating the roll-out of robo-advice within ING from the bank's German headquarters in Frankfurt, says the current focus is on individuals who already have some familiarity with investing.

“That group understands the advantage automation has to help them easily diversify their portfolios compared to the time-consuming process until now of handpicking investments,” he says.

But he also sees the potential to attract new customers to investing and to overcome any concerns about giving up control.

“For people looking for an alternative to saving, robo-advice provides a level of service that until now that was only available to customers with large investment portfolios," he points out. "It tailors and manages investments to meet individual needs and risk appetites. That makes it easier to achieve a particular investment goal.

“As for control, the digital age provides people more possibilities to actively follow and steer their investments than ever existed before. It’s up to us now to design products with features that let people do that.“

Comments: (1)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 01 June, 2017, 17:09

As neobanks learned to their dismay, it's an exercise in futility to expect first time bank customers to forsake a bank branch for a mobile app. While the article makes no mention of the profile of the surveyed audience, I'm reasonably sure it's people who don't do much investing now, whether by themselves or via human financial advisor. Just as in the case of neobanks, it's highly unlikely that first time investors will accept a robo-advisor.

That said, after having a human stock broker handle my stock trading for 15 years, I moved online at the earliest available opportunity, which was in circa 2000. While the eTrading platform has its own niggling issues, it ticks the big boxes far better than any human broker could / can do. Warts and all, I'll never go back to a human advisor. That tells me that, if the same survey were held among people who are already doing some investing, the results would be quite different. That's what I think Martin Krebs is hinting at in his statement about people having "some familiarity with investing".

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