Axis Corporate, in collaboration with Efma, has carried out a study with the aim of offering a vision of digitising financial advisory services using Robo-Advisory and its growth potential.

Robo Advisors provide a low-cost, flexible and efficient alternative to the traditional wealth management approach. The market for investment advice is changing rapidly. Customers, used to having instant access to information on purchase decisions in all other aspects of their lives, are demanding this from financial services providers.

With many banks abandoning the provision of financial advice to the mass affluent segment, it is also providing a significant opportunity for Google, Amazon, Facebook or Apple (GAFA) – new technology-enabled players – to enter the market and cater to this large and financially attractive group.

The purpose of this Robo-Advisory report is to assess the progress to explore the likely ways in which digital will continue to evolve in the Financial Services industry going forward, and to determine the future of advisory services in light of the evolution of technology and its continued adoption by both new and established players.

Key Findings:

  • European banks are poised to digitise their personalised financial services offerings to counter the disruptive effect of BigTech in the sector. The key drivers of this wave of digitisation are – an increase in avaialbility of financial services via digital channels, improvements in customer experience across all available channels, and more efficient and rigorous commercial processes.
  • Nearly 70% of banks have placed digitising financial advisory services amongst their top strategic priorities, although they also fear losing their ability to differentiate as a result of applying a ´digital-only´ or ´digital-first´ strategy.
  • 95% of banks felt that digitisation would materially affect the role of bank branches, with the ´hybrid model´ where advice can coexist with face-to-face and digital channels, being favoured as the best fit option for the future.

Luis Fernández de Nograro, Financial Services & Real Estate Partner, Axis Corporate and José Luis Álvarez, Head of Strategic Consulting, Axis Corporate, highlighted that digitisation will change the game for banks in two fundamental ways in the near future. Firstly, that digital financial advice will be made available to a segment of the market that previously could not access these services, and secondly, that the change will bring about the need to redesign the banking distribution model.

Daniel Meere, Managing Director, Axis Corporate, UK added “The importance of offering the right product to the right person at the right time and place has become even more critical. By analysing clients activities and habits together, banks can better understand the needs of the clients they serve and match these needs with relevant offers which can extend far beyond the limited scope of traditional investment management services.”

Luis Fernández de Nogaro concluded that “defining the future operational model, commercial processes and relationship approach will be the critical success factors for banks in coming years.”

The report foresees that in the coming years a ´democratisation´ of complex financial advisory services will take place, removing the current barriers to access for all but the most wealthy clients, and putting financial advice within the reach of the masses.