Robo-advisory an intrinsic convergence of ai in enhancing investment returns – An empirical analysis

K. P. Ramesh; R. Amudha; K. C. Prasob; Jose Francis

doi:10.31893/multiscience.2023ss0321

Keywords:

artificial intelligence (AI)

Abstract

The vigor of Robo-advisory is anchored along with AI (Artificial Intelligence) to expedite, synthesize and synchronize the requisite information, an enabler in the progression of upscaling and facilitating financial intelligence and advice, to the xennials and the millennials, on their investment patterns. Innumerable times the investors usually behave irrationally in their investment decisions on selecting financial instruments, schemes or in trading, generally termed as behavioral biases. The prime target for Robo-platforms are the Millennials and the Xennials, due to affordability, 24/7 accessibility and utmost transparency with zero or nil investment bias, through a fusion model (of Robo-plus -Human) or a hybrid strategy, that can help to invigorate the investor’s investment goals. Henceforth this analytical study pertains to apply the advanced TAM (Technology Acceptance Model) on some of the significant variables such as the Perceived Usefulness, Perceived Trust, Perceived Security and the most inevitable demographic variables of the investors, administering the Structural Equation Model, that has confirmed, much remarkable user interface and the competences of AI has played a predominant role in structuring better ease- of- usage, trust and security among the investors on utilizing the Robo-Advisory Services.
References
1. Abraham, Facundo, Schmukler, Sergio, Tessada, Jose (2019) Financial Innovation and Additionality: The Power of Economic Analysis and Data Analytics. World Bank Research and Policy Briefs 138280. Available at: https://ssrn.com/abstract=3586630
2. Amudha R, Muthukamu M (2018) Modeling Symmetric and asymmetric volatility in the Indian stock market, Indian Journal of Finance 12:23-36.
3. Ankita Bhatiaa, Arti Chandania, Jagriti Chhatejab (2020) Robo advisory and its potential in addressing the behavioral biases of investors A qualitative study in Indian context, Journal of Behavioral and Experimental Finance 25:237–261.
4. Belanche D, Casaló LV, Flavián C (2019) Artificial Intelligence in FinTech: understanding robo-advisors adoption among customers. Industrial Management & Data Systems 119:1411-1430. Available in: DOI: 10.1108/IMDS-08-2018-0368
5. Cedrell L, Issa N (2018) The adoption of robo-advisory in the Swedish financial technology market: Analyzing the consumer perspective.
6. Clarke Demo (2020) Robo-Advisors - Market Impact and Fiduciary Duty of Care to Retail Investors. DOI: 10.2139/ssrn.3539122
7. Fein ML (2015) Robo-advisors: A closer look. Available at SSRN 2658701?
8. Fein, Melanie L (2016) Robo-Advisors: A Closer Look. SSRN: 10.2139/ssrn.2658701. Researchgate online journal (2016).
9. Fisch, Jill, Laboure, Marion, Turner, John (2019) The Emergence of the Robo-Advisor, The Disruptive Impact of FinTech on Retirement Systems 13-37.
10. Francesco D’Acunto, Nagpurnanand Prabhala, Alberto G Rossi (2019) The Promises and Pitfalls of Robo-Advising, The Review of Financial Studies 32:1983–2020. DOI: 10.1093/rfs/hhz014
11. Hakla, Krista (2019) Robo-advisors as a form of artificial intelligence in private customers’ investment advisory services, Available in: https://aaltodoc.aalto.fi/handle/123456789/39329.
12. Lilly A, Rajkumar R, Amudha R (2022) Aggrandizing the human resource development with underpinning artificial intelligence, Journal of Statistics and Management Systems 25:1083-1094.
13. Sironi P, (2016) FinTech innovation: From robo-advisors to goal based investing and gamification. Wiley. DOI: 10.1002/9781119227205.
14. Tokic D (2018) BlackRock Robo Advisor 4.0: When are artificial intelligence replaces human discretion, Strategic Change 27:285–290. DOI: 10.1002/ jsc.2201

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

How to cite

Ramesh, K. P., Amudha, R., Prasob, K. C., & Francis, J. (2023). Robo-advisory an intrinsic convergence of ai in enhancing investment returns – An empirical analysis. Multidisciplinary Science Journal, 5, 2023ss0321. https://doi.org/10.31893/multiscience.2023ss0321

[1] Abraham, Facundo, Schmukler, Sergio, Tessada, Jose (2019) Financial Innovation and Additionality: The Power of Economic Analysis and Data Analytics. World Bank Research and Policy Briefs 138280. Available at: https://ssrn.com/abstract=3586630

[2] Amudha R, Muthukamu M (2018) Modeling Symmetric and asymmetric volatility in the Indian stock market, Indian Journal of Finance 12:23-36.

[3] Ankita Bhatiaa, Arti Chandania, Jagriti Chhatejab (2020) Robo advisory and its potential in addressing the behavioral biases of investors A qualitative study in Indian context, Journal of Behavioral and Experimental Finance 25:237–261.

[4] Belanche D, Casaló LV, Flavián C (2019) Artificial Intelligence in FinTech: understanding robo-advisors adoption among customers. Industrial Management & Data Systems 119:1411-1430. Available in: DOI: 10.1108/IMDS-08-2018-0368

[5] Cedrell L, Issa N (2018) The adoption of robo-advisory in the Swedish financial technology market: Analyzing the consumer perspective.

[6] Clarke Demo (2020) Robo-Advisors - Market Impact and Fiduciary Duty of Care to Retail Investors. DOI: 10.2139/ssrn.3539122

[7] Fein ML (2015) Robo-advisors: A closer look. Available at SSRN 2658701?

[8] Fein, Melanie L (2016) Robo-Advisors: A Closer Look. SSRN: 10.2139/ssrn.2658701. Researchgate online journal (2016).

[9] Fisch, Jill, Laboure, Marion, Turner, John (2019) The Emergence of the Robo-Advisor, The Disruptive Impact of FinTech on Retirement Systems 13-37.

[10] Francesco D’Acunto, Nagpurnanand Prabhala, Alberto G Rossi (2019) The Promises and Pitfalls of Robo-Advising, The Review of Financial Studies 32:1983–2020. DOI: 10.1093/rfs/hhz014

[11] Hakla, Krista (2019) Robo-advisors as a form of artificial intelligence in private customers’ investment advisory services, Available in: https://aaltodoc.aalto.fi/handle/123456789/39329.

[12] Lilly A, Rajkumar R, Amudha R (2022) Aggrandizing the human resource development with underpinning artificial intelligence, Journal of Statistics and Management Systems 25:1083-1094.

[13] Sironi P, (2016) FinTech innovation: From robo-advisors to goal based investing and gamification. Wiley. DOI: 10.1002/9781119227205.

[14] Tokic D (2018) BlackRock Robo Advisor 4.0: When are artificial intelligence replaces human discretion, Strategic Change 27:285–290. DOI: 10.1002/ jsc.2201

Abstract

References

How to cite