Process automation remains one critical factor in the growth of the FinTech movement over the last decade. Notably, it leverages the same AI and machine learning technology used in customer service chatbots within the financial world.
Automated advising on the securities market also relies on similar technical innovations powering data analytics. This robo advisory market is an often overlooked area of FinTech, also seeing massive growth. In fact, some tech pundits predict this rapidly expanding sector to reach $135 billion by 2026. So let’s take a closer look at the impact of robo advisory technology on the investing world.
What is the Emergence Of Robo Advisory Market?
Detailing the Growth of the Robo Advisory Market
As highlighted above, a recent research report predicts the global robo advisory market to hit $135 billion by 2026. Notably, the compound annual growth rate (CAGR) over this period is a massive 48 percent. Needless to say, this sector within FinTech boasts significant opportunities for tech companies with the necessary AI experience.
Granted, some of this growth potential relates to the economy recovering after the COVID-19 pandemic. Still, that high CAGR makes this market worthy for IT organizations looking to expand their FinTech service offerings.
Analyzing the Technology Reasons Behind the Robo Advisory Market Growth
Like the rest of FinTech, various technologies introduced over the last decade power the robo advisory market expansion. Advancements in AI, machine learning, and data analytics play a crucial role in providing the power for automated securities advising. These digital platforms leverage state-of-the-art algorithms to deliver financial planning services. Typically, little human supervision is necessary for this role.
In a similar manner as other functions enhanced by automation, human securities professionals now focus on more complex tasks. These include estate planning and other advisory duties requiring more of a personalized touch. In fact, one of the criticisms of robo advisors involves the lack of empathy typical of any automated platform.
However, expect this aspect of robo advisory to improve in tandem with the models used to power the algorithms. This process optimization remains one of the main reasons analysts are so bullish on the growth of this market. They predict the effectiveness of this approach to increase, providing more value to investors over time. While North America remains the largest sector in robo advisory, Asia-Pacific enjoys the highest potential growth rate.
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