Robots are taking over the world. Okay, maybe not really, but Bank of America wants to add finances to the list of things that they could be put in charge with, joining a list of several other banks to do so.
According to recent reports, Bank of America wants to implement algorithms that will be able to offer users advice on investments or on mobile apps, without there being any humans involved along the way. BofA says it will roll an "automated investment prototype" next year, which will offer advising for accounts that have less than $250,000.
Of course, the real question is whether or not users will want to entrust their hard-earned cash to a robot. Wells Fargo and Morgan Stanley have both expressed interest in similar systems, with executives at the banks suggesting that young customers won't really care that algorithms are being put in charge of financial issues.
In fact, "robo-advising" has been growing in popularity over the past few years, with it being popularized by companies like Betterment LLC, which was launched in 2010. The service essentially allows high earners under 50 to enter their information and goals, after which, algorithms will suggest investment opportunities, usually at low-risk.
These systems could be very beneficial for banks, too, which wouldn't have to have as many employees at any given time. With full-service brokers typically charging annual fees of at least one percent on a $100k investment, these algorithms could mean savings of $50k over 20 years, according to the report by Bloomberg.
Of course, human advisers will still need to manage more nuanced situations, especially when it comes to rich clients. These situations will include things like estate planning and tax advice.
Via: Gizmodo
