Morgan Stanley
  • Technology
  • Oct 10, 2018

Cyborgs and the future of finance

Are we ready for robo advisers?

As the brave new future of disruptive technology edges closer, the spectre of Artificial Intelligence (“AI”) and its impact on the workforce looms large. But within the finance sector, cyborgs are already making their presence felt.

No longer just a futuristic notion, financial advice provided by robots – known as robo advice – is already utilised by organisations across the world. Furthermore, according to a new report from Morgan Stanley Research, robo advisers are here to stay. 

So what does this mean for the approximate one in five Australians who currently have some form of relationship with a financial adviser? 

Will the friendly smiles and familiar voices of trusted finance professionals be sidelined in favour of hard-wired monotone and metallic interactions?

The best of both worlds

When contemplating the future form of financial advising services, it’s necessary to understand that the work performed by Financial Advisers is far from one dimensional.

Competent advisers are well educated in their area of expertise and armed with a comprehensive practical knowledge around a broad range of aspects of finance and compliance, but they also depend on a cache of other skills to perform their job effectively. It’s a role that’s as much about people as it is about finances. Communication, in its full range of subtleties, is the tool used most often in the advising field. 

This is the key reason why existing clients of Financial Advisers can remain hopeful that the standard of service they receive will not necessarily be diluted by technological advancement. In fact, a combination of robotic technology and human interaction – also known as a cyborg model - could represent the best of both worlds, and even enhance the client experience.

We see opportunity for pure robo offers, ‘cyborg’ solutions – both human and machine – and traditional face-to-face models underpinned by digital capabilities. This will benefit Advisers while broadening the advice market.

– Morgan Stanley Research.

An evolving opportunity

Cyborg models are already being utilised as an effective form of robo advice – with most robos providing call centre and live chat support in addition to a range of other efficiency benefits, although they are limited to offering simple analysis and fall short of being able to apply a more holistic view of client finances.

There is scope for the robos to evolve, however, as their technology is adopted more widely. 

Research from Morgan Stanley posits that robo advisers could become advanced enough to form “part of a broader customer relationship, recommending the best investment allocation, taking into account pension, insurance, spending trends, employment and family situation.”

Putting numbers to their analysis of the new technology, Morgan Stanley estimates there will be $6.5trillion in assets under management globally for robo advisers, including incumbents, in just 10 years’ time.


For information on investment opportunities in emerging and innovative technologies, please contact your Morgan Stanley Financial Adviser.