Towards Designing Robo-Advisory to Promote Consensus Efficient Group Decision-Making in New Types of Economic Scenarios

Robo-advisors are a new type of FinTech increasingly used by millennials in place of traditional financial advice. Building on artificial intelligence, robo-advisors provide personalized asset and wealth management services. Their application and study have hitherto focused exclusively on individual advisory regarding asset management. We observe a pressing need to investigate robo- advisors’ application for complex artificial intelligence based recommendation tasks both, in context of group decision-making and in contexts beyond asset management, due to robo-advisors’ potential as a lever for integrating artificial intelligence in the entire decision-making process. Thus, we present a action design research in progress aimed at designing such a robo-advisor. More specifically, this study investigates whether and how robo-advisory promotes consensus-efficient group decision-making in new types of economic scenarios (after-sales). Based on a comprehensive problem formulation, we aim towards deriving a set of meta-requirements and design principles that are embodied in a preliminary prototypical instantiation of a robo-advisor

Financial Robo-Advisor: Learning from Academic Literature

Financial Robo-Advisor is the technology that integrates machine learning and self-identification to determine investment decisions. This study explores the financial robo-advisor based on bibliometric analysis and a systematic literature review. The method used three steps: determining the keyword, bibliometric analysis of literature metadata using VOSviewer, then collecting and analysing the articles. The bibliometric analysis results show five cluster keywords defined with different colors. In the network visualization, the robo-advisor connects to other keywords: investment, fintech, and artificial intelligence. Furthermore, the systematic literature review shows that the articles are divided into seven research objectives: (1) Law, Regulation, and Policy; (2) Investment Literate and Education; (3) Offered Services; (4) Present Risk-Portfolio Matching Technology; (5) Optimal Portfolio Methods; (6) Human-Robo Interaction; (7) Theoretical Design and Gap. Furthermore, this study can be used by academicians and practitioners to find out about robo-advisors based on an academic perspective

The Digitization of Investment Management – An Analysis of Robo-Advisor Business Models

The emergence of so-called Robo-Advisors (RAs) is disrupting the financial services industry. RAs are algorithm-based systems that digitize and automate the investment advisory process including portfolio recommendation, risk diversification, portfolio rebalancing, and portfolio monitoring. Scientific research in this field is still in its infancy and lacks a comprehensive understanding of the underlying business model (BM) of RAs to comprehensively understand the RA business and to further identify their potential to disrupt the financial services industry. Therefore, in this article, we conduct a multiple case study across the fifteen biggest US-based RAs to explain the basic characteristics and special features of RA BMs. Thereby, we distinguish between pure algorithm-based RAs and hybrid RAs with dedicated human oversight. Through an in-depth analysis of publicly available qualitative data, we contribute to the existing research by unleashing significant elements that underline the power of RAs to disrupt the financial services industry

Automation in Investment Advice. A European Perspective

This article investigates how automated investment advice (often called robo-advice) fits into the current European regulatory framework. It depicts and defines the phenomenon through the eyes of a European lawyer, both overviewing its potential benefits and risks, and outlining the main business models on the market. It analyses the challenges posed by the application of the Mifid ii regime, especially in terms of investor protection.El presente artículo investiga cómo se encuadra el asesoramiento de inversión automatizado (también llamado asesoramiento robótico) en el actual marco regulatorio europeo. Desde el punto de vista de un jurista europeo se describe y define el fenómeno, destacando sus beneficios y riesgos potenciales, y delineando los principales modelos de negocio en el mercado. Analiza los retos que implica la aplicación del régimen Mifid II, especialmente en el ámbito de la protección de los inversores

Industrializing Swiss Private Banks: A Strategic Road Map

This paper analyzes the industrialization processes of Swiss private banks against the background of strategic approaches, future trends, and potential risks in this sector. Overall, industrialization is identified as the basis for the successful implementation of innovative and disruptive services and technology, and banks’ collaboration with (external) service providers is likely to play an increasingly important role with regard to such implementation. Strategic conclusions for Swiss private banks are captured in 10 distinct recommendations that each bank should consider when planning its industrialization strategy. Hereby, three principal themes are covered—namely, the strategic positioning of private banks with regard to bank size, business model, and other factors; optimized operations, which deals with the question of how to increase the efficiency of internal processes; and ways to reduce the obstacles that private banks face with regard to successful outsourcing. The underlying strategic requirements are a holistic approach to strategy and an ongoing improvement culture

Digital Transformation in Service Management

The digital transformation of single companies and of entire service businesses is an omnipresent topic – not only in the academic discourse but also in the current public debate. The topic is often approached phenomenologically. We invited a group of well-renown scholars from different academic fields to share with us personal observations and interpretations of the digital transformation in service management in the form of individual commentaries that go beyond. The commentaries we received are based on different theoretical perspectives. They include motivations of why digital transformation makes service management research (smr) more relevant, they depict implications for service companies, and they outline research needs. This article conflates the submitted commentaries, and it is the first SMR special research paper – a paper type that will be continued in future issues to explore topics in a similar fashion that are likely to have a significant influence on the development of smr.</p

A Classification of Decision Automation and Delegation in Digital Investment Management Systems

Digital investment management systems, commonly known as robo-advisors, provide new alternatives to traditional human services, offering competitive investment returns at lower cost and customer effort. However, users must give up control over their investments and rely on automated decision-making. Because humans display aversion to high levels of automation and delegation, it is important to understand the interplay of these two aspects. This study proposes a taxonomy of digital investment management systems based on their levels of decision automation and delegation along the investment management process. We find that the degree of automation depends on the frequency and urgency of decisions as well as the accuracy of algorithms. Notably, most providers only invest in a subset of funds pre-selected by humans, potentially limiting efficiency gains. Based on our taxonomy, we identify archetypical system designs, which facilitate further research on perception and adoption of digital investment management systems