Robo advisor, your reliable partner? Building a trustworthy digital investment management service
Salo, Anni (2017)
2017
Kauppatieteiden tutkinto-ohjelma - Degree Programme in Business Studies
Johtamiskorkeakoulu - Faculty of Management
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Hyväksymispäivämäärä
2017-11-02
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:uta-201711032673
https://urn.fi/URN:NBN:fi:uta-201711032673
Tiivistelmä
Investment management services have strongly relied on traditional face-to-face business models, causing the services being highly expensive and therefore available only for the wealthiest population. Recently a new digital business model, robo advisors, entered the market and are predicted to democratise the entire industry by bringing investment management services available to a wider public than ever before.
Although the business models in financial services are changing, customer trust and loyalty are still essential for the sensitive industry. Therefore, the purpose of this study is to describe and analyse how trust and loyalty emerge in the context of digital investment management services. In terms of customer understanding, this study also reviews the reasons for a customer to prefer a digital investment management service over the traditional model.
The theoretical framework of the study consists of a review into traditional and digital service characteristics and the process of building a customer relationship. Building a customer relationship includes concepts of service quality, satisfaction, trust and loyalty. The research data was generated with qualitative methods by observing in two industry seminars and interviewing five industry experts in Europe.
Findings of the study propose dividing the customers of robo advisors into four different segments. Delegators are seeking to fully outsource their investment management, optimisers want to find the most efficient option for their investments management, DIY segment only seeks for advice to support their investment decisions, and the fourth B2B2C segment refers to a white-label service delivered to individuals via other service providers.
Furthermore, to build trust, robo advisors should fulfil the major quality dimensions of utilising advanced technologies, fascinating user experience, suitable financial product offering, and a wide customer base. The importance of a strong brand, customer support availability, and a fluent omni-channel approach were also recognised as important trust- building elements. Service providers attempting to strengthen customer loyalty should consider advanced customer engagement techniques.
The findings of this study assist practitioners in understanding customers and business models in digital investment management services. The managerial implications can be especially useful for executives, business developers and consultants working with building digital offerings for investment management companies.
Although the business models in financial services are changing, customer trust and loyalty are still essential for the sensitive industry. Therefore, the purpose of this study is to describe and analyse how trust and loyalty emerge in the context of digital investment management services. In terms of customer understanding, this study also reviews the reasons for a customer to prefer a digital investment management service over the traditional model.
The theoretical framework of the study consists of a review into traditional and digital service characteristics and the process of building a customer relationship. Building a customer relationship includes concepts of service quality, satisfaction, trust and loyalty. The research data was generated with qualitative methods by observing in two industry seminars and interviewing five industry experts in Europe.
Findings of the study propose dividing the customers of robo advisors into four different segments. Delegators are seeking to fully outsource their investment management, optimisers want to find the most efficient option for their investments management, DIY segment only seeks for advice to support their investment decisions, and the fourth B2B2C segment refers to a white-label service delivered to individuals via other service providers.
Furthermore, to build trust, robo advisors should fulfil the major quality dimensions of utilising advanced technologies, fascinating user experience, suitable financial product offering, and a wide customer base. The importance of a strong brand, customer support availability, and a fluent omni-channel approach were also recognised as important trust- building elements. Service providers attempting to strengthen customer loyalty should consider advanced customer engagement techniques.
The findings of this study assist practitioners in understanding customers and business models in digital investment management services. The managerial implications can be especially useful for executives, business developers and consultants working with building digital offerings for investment management companies.