Trend of Google’s AI (Artificial Intelligence) ‘AlphaGo’ that surpasses humans is taking over financial industry. Banks and stock firms are actively working on introducing Robo-Advisors that use AI algorithms.
According to industry on the 13th, banks and stock firms are examining on introducing Robo-Advisors one after the other.
Robo-Advisor is a computer algorithm service that makes advises on investments by predicting profit ratio in stock markets and is made by combining data from markets in the past and know-how of management done by people into computer algorithms. Although it has started in financial industry from the U.S., South Korean businesses such as Quarterback, AIM, DNA, NH Investment & Securities Co., Ltd. And others had finished development and planning to make services official.
Shinhan Bank recently partnered up with DNA and has decided to make a model of Robo-Advisor, which will use asset allocation technology that includes stocks, ETF, funds, derivative goods and others and is based on Machine Running Algorithm that is developed by DNA. It will decided on products and investment ratio that correspond to customers’ tendency by calculating profits and risks at the same time. Shinhan Bank is planning to release a beta version of fund recommending service that uses Robo-Advisor algorithm next month.
Samsung POP is also going to introduce its own Robo-Advisor in June.
Popularity for Robo-Advisors that current businesses have introduced is becoming bigger.
“Interests in Robo-Advisors have gotten bigger due to AlphaGo’s effect.” said CEO Yang Shin-hyung of Quarterback Investment. “Besides making partnerships with KB Bank, Daewoo Securities Co., Ltd., NH Investment & Securities Co., Ltd. And others, there are many banks and stock firms that want to sell Robo-Advisors.”
CEO Yang also added that Robo-Advisors will continue to evolve just like how AlphaGo has shown its evolution.
“Just like how AlphaGo builds more data and learn more moves as it has more battles, algorithm in management ability will be rapidly improved by accumulating data and experience in management.” said CEO Yang. However regulations need to be eased if banks and stock firms want to introduce Robo-Advisors.
Having robots be in responsible in managing assets is an act that violates laws. Ultimately robots can only make advises when operators manage funds and others.
Face-to-face contract that has customers to join by personally visiting financial business branch or seeing an employee of a branch is another task that needs to be solved. When investors want to join, they need to visit a branch or an off-line business because non-face-to-face entrusting contract is only limitedly allowed within ISA.
Possibility of decrease in jobs due to vitalization of Robo-Advisors is a task that financial businesses and executives and employees need to shoulder. If robots start to manage assets, there is a huge possibility that people who used to manage assets will become SW developers that control robots and algorithm engines. Number of branches will decrease also. Robots are even threatening jobs in financial industry.
“If AI becomes more enhances just like AlphaGo, it will produce profit ratio that is more advanced than the ones that humans make by using its intuition and insight that are far greater than human’s.” said an employee of a stock firm. “Investors will naturally prefer investments from robots and operators in stock firms will start to lose their jobs.”
Staff Reporter Lee, Kyungmin | kmlee@etnews.com