Why Building Your Own Robo-Advisor Could Set You Back a Number of Years and Cost Your Company Relevancy in the Marketplace

The relevance and sustainability argument surrounding Robo-Advisory may finally be put to rest as yet another player in the Financial Services industry has formally announced intention to rollout a Robo-Advisory platform of their own.

Goldman Sachs is the newest addition to the growing list of industry heavyweights that have made a conscious decision to incorporate a Robo-Advisory service to their existing platform. Goldman has opted to build their Robo-Advisor versus acquiring or partnering with an existing Robo-Advisor like industry competitor UBS has with SigFig.

When a wealth management company decides to build their own technology and, in this case a Robo-Advisor, this can set the company back behind the competition by a number of years. The reality of designing a proprietary platform and offering to go-to-market with a competitive product can take a minimum of 20-26 months. The Robo-Advisor space has been maturing for a number of years, which means the likelihood of a proprietary V1.0 product that can compete in the marketplace is on the lower end of the scale.  By the time a company rolls-out a V1.0 of their product, the competition may already be offering V3.1.

When you look at the, “buy versus build” argument from this perspective, buying or partnering with an established service is much more attractive when it comes to a fast go-to-market strategy and ROI since the costs of developing proprietary technology can skyrocket. The Robo market is already treading on extremely thin margin and the trend will continue lower with increased customer CPA (Cost Per Acquisition) and marketing fees.

So how can a bank, insurance company, wealth manager, asset manager compete in the current conditions and stay relevant? Most financial services companies do not want a “cookie cutter” product; they want a customized client journey that is tailored to their brand and corporate culture. Partnering with the right technology company can help the financial services company maintain their brand, culture and mission and values statement.

As “Privé Managers, now focus on selling robo-services and technology directly to wealth managers, banks and insurance groups,” we have the domain knowledge and the insight to help financial service companies go-to-market and compete at a much faster rate and realize ROIs. We also have the infrastructure and foundation of an AI based Robo-Advisor to partner with and design a unique customer journey for any wealth manager, asset manager, bank or insurance company that will get them to market faster (most of the time within several months) and at a fraction of the cost it takes to build proprietary technology.

In this day and age when speed and budget is everything, building costly proprietary technology to compete in the marketplace is something to consider when trying to keep your business relevant.

Jovin Shen

Head of Sales & Marketing


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