This week, banker’s fears were confirmed and the robot revolution has begun. The Royal Bank of Scotland (RBS) will sack hundreds of face-to-face advisers and replace them with a robo-advisory online service, after the Financial Conduct Authority (FCA) approved this technology.
“Our customers increasingly want to bank with us using digital technology. As a result, we are scaling back our face-to-face advisers and significantly investing in an online investing platform that enables us to help a new group of customers with as little as £500 to invest,” a RBS and NatWest spokesperson said in a statement according to the BBC.
More and more banks are searching for digital options because they are cheaper and easier to use, and this attitude is advocated by the FCA. However, the BBC also reported that the service would only be offered to customers with more than £250,000 to invest. According to the FCA’s final Financial Advice Market Review report, robo advice could “play a major role in driving down costs.”
Leon Stafford, territory manager for financial services at Genesys Interactive Intelligence highlighted that businesses are also moving in this direction as this is how they become viable competitors in their respective industries. “There is no doubt that robots, driven by advancements in AI, will transform customer service as smarter automation means more rote tasks will be handled by robots, aiming to enhance the role of the agents and service advisors.”
Many banks have had this positive attitude towards robots as in February 2015, it was announced that Mitsubishi UFJ would employ humanoid robots called Nao, developed by the French Aldebaran Robotics. The bank was one of many that were investing in non-human resources after the Prime Minister, Shinzo Abe, encouraged the country to use robots to assist financial growth.
Chief manager of information technology initiatives at Mitsubishi UFJ, Takuma Nomoto, believed that these machines could replace jobs for humans, but do them better. “Robots can supplement services by performing tasks that our human workers can’t, such as 24-hour banking and multilingual communication.”
As well as this, last year Deloitte released a report called “Robo-Advisors Capitalising on a growing opportunity”, which explored how 11 leading robo-advisor firms have grown by 65% to retain around $19 billion in assets under management. The report found that due to the accessibility of newer technology, wealth management was simplified and predicted that more asset management and insurance companies would use this form of consulting more so in the future.
However, the report warned of some risks. “While this could be an accelerated route-to-market for traditional investors, acquisition has its risks. How the firm is able to effectively integrate the acquired platform within it existing infrastructure will be key.”
RBS’s actions have confirmed a fear that many bankers have and that is that increased use of technology would result in jobs being taken over by robots. However, CEO of the robotic process provider, Automation Anywhere Inc, Mihir Shukla, said that while in the short term, automation does reduce the number of available jobs, in the long run, software can help businesses operate more effectively. “If you think like a human, there are only certain things you can do. When you think like a robot, many things are possible.”
Alongside this, 2015 saw many reports of bankers leaving the finance industry for technology jobs with zero-salary jobs because investment firms decided to minimise certain lines of business. Bloomberg believes that this is because there are fewer brokers, the markets are transforming and professionals are considering change and value.
Former MD of Entiq, and now Special Adviser to DIT on Fintech and Blockchain, Eric Van der Kleij, provided a different perspective to this and said that new technology created opportunity for people to move into new areas. “This is all part of the continuum of evolution and the smartest people will remain in the talent pool for the most innovative jobs”.