The advent of the robo-adviser era

We can all feel the changes that the mobile revolution has brought to our life in general. A distinct feature that can be found in these changes is the appearance of the extensive mobile-based platform. For example, the service platform Uber has allowed users to conveniently travel without owning a car. The world’s biggest transportation company was born without owning a single vehicle.

Finance is no exception. Robo-advisers, which provide automated asset management solutions, are the new trend in wealth management.

Robo-advisers are automated investment specialists. In the United States, robo-advisers began to appear since 2010, and as of February 2016, they manage over 250 trillion won ($213.6 billion) in assets.

Korea’s robo-adviser industry had a late start, but its development is not much different from that of the United States. The early market model is formed with tech-based startups providing online asset management services and existing financial companies entering the market as the business model is verified.

At present, a robo-adviser testbed participated in by more than 30 Korean companies is in progress. Companies that pass the test are to begin automated, low-cost service close to robo-adviser using online platforms. If asset management can be done without a face-to-face meeting, full robo-adviser service will be provided in Korea. Moreover, Korean companies can export their robo-advising algorithm.

Robo-advisers and robo-investment have affirmed that technological advancement can bring innovations in the financial industry. Now, financial consumers should also be ready to enjoy robo-advisers and automated asset management.

Yang Sin-hyung,
CEO of Quarterback Asset Management