Early next year the Financial Markets Authority (FMA) stands ready to welcome the first generation of fully-personalised (but potentially dehumanised) financial advice robots to NZ shores.
But what are the bots going to do when they get here? And how should the (potentially human) NZ financial services industry respond to the automated challengers when they arrive?
Until now the debate on so-called ‘robo-advice’ has been light on detailed answers to those questions.
However, in a white paper published today, specialist consultancy firm Mosaic Financial Services Infrastructure fleshes out the likely practical consequences of the imminent digital advice (DA) revolution for the NZ industry.
The Mosaic ‘Bot or Not?’ white paper – produced in association with Investment News NZ (IN NZ) – provides a working definition of DA, explores its historical roots, and the current robo-global state of affairs.
“While a latecomer to the DA party, NZ is well-placed to learn from the global experience and quickly come up to speed,” the Mosaic report says.
If the NZ market is to hit the ground running, though, the various parties involved must take a clear-eyed look at the threats and opportunities posed by DA.
“The diverse bunch of DA providers – ranging from clever start-ups to financial advisory firms to status quo institutions – set to enter the NZ market on the back of the FMA exemption need to carefully consider their strategies,” the Mosaic paper says.
The study, prepared by Mosaic founding partner, Myles Allan, lists a few of the most important questions all interested players should address before they enter the DA game.
Interestingly, offshore trends suggest the robots are unlikely to replace humans for some time yet with the ‘hybrid’ DA model – offering clients access to real advisers somewhere in the process – gaining ascendance.
“Rather than the slightly malevolent fictional world of ‘robo-advice’, Mosaic presents DA as a real-life business opportunity with a history, a present and a future,” the report says.
Click here for a free copy of ‘Bot or Not: A guide for NZ financial services firms entering the Digital Advice age’.