Robotics on the rise


A UK parliamentary report on robotics and artificial intelligence (AI) claims that advances in robotics and AI hold the potential to reshape the way we live and work. It addresses the UK positioning on education, leadership and public perception of AI. The report calls for the government to address the digital skills crisis through a digital strategy, to be published without delay.

Also released this week, a whitepaper from EValue shows how the technology behind robo-advice has the capacity to reduce the cost of delivering advice to consumers and also to pave the way for new direct ways of delivering advice and financial products. EValue’s founder and strategy director Bruce Moss notes that the line between advice and guidance must not get blurred in the rush to capitalise on market opportunity.

Robo-advice is burgeoning in the UK, with a significant number of start-ups emerging and existing players adapting their business models to stake a claim to the space. As a result of regulatory pressures in the UK, robo-advice products will need to meet the same suitability standards as traditional advice and consequently the streamlining of the advice process will be limited. But, if institutions can take the step in adopting true robo-advice, then the behavioural finance and gamification techniques that can be applied in the advice process could boost engagement in a way that has never before been experienced by the financial services industry.

Personalisation is the key to consumer engagement, according to the whitepaper. Cyborg or hybrid advice, in which all robo-generated recommendations are checked, will likely be a popular approach for cautious financial institutions. Another reason for the popularity of cyborg is that it triggers an additional check to identify and respond when a red flag is raised around a consumer’s completion of the questionnaire – for example if they rush through or complete only half – an issue unique to digital advice and avoided by face-to-face. It is likely that over time, for the mass market offering, the use of management information (MI) will enable the digital process to become smarter and evolve, with human involvement decreasing.

“New research unveiled today shows there is no understanding of the difference between guidance and advice among consumers,” says Moss. “The FCA states that if a consumer feels they’ve received advice then it can be deemed as such, so there is clearly a pressing need for the financial world to respond. This is particularly urgent today as the majority of UK robo solutions offer guidance rather than regulated advice. And yet, in a post-pension freedoms, auto-enrolment world, there has never been more need for consumers to have access to robust financial advice to assist them in making informed financial decisions.”

Chris Williams, head of digital advice at Nationwide, commented: “We are really excited about the potential of robo in consumer advice. Ultimately this is likely to lower the cost of advice and it should enable us to improve customer engagement.  Robo-advice is not about replacing advisers; instead we expect very soon to see a wholesale shift in the way consumers interact with the financial institutions they rely on. It is vital that institutions understand exactly how robo-advice fits in with their proposition. It’s not enough for them to simply white-label something and hope it works for consumers. By trialling robo we are putting our customer needs first and ensuring we match their demand for advice with cross-channel consistency – whether automated, hybrid or full face-to-face.”

Commenting on the UK parliamentary report, Gary Turner, co-founder and MD of Xero noted: “If AI reduces scope for jobs, concepts like working 3-4 days per week and having longer weekends would be a great outcome for everyone. In reality, small and medium sized businesses (SMBs) contribute just over 50% of the UK’s total economic output, yet SMBs have been historically slow or hamstrung when it comes to employing the technologies or staff that will boost their productivity. Availability of accessible and low cost AI services and tools could unlock huge improvements in SMB productivity and therefore boost overall productivity in the UK.”


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