ESAs published a report on the results of the monitoring exercise on automation in financial advice. The report shows that while the phenomenon of automation in financial advice seems to be slowly growing, the overall number of firms and customers involved is still quite limited. ESAs believe that no immediate action is necessary, as the identified risks have not materialized and the growth of automation in financial advice is limited.
The report presents the results of the monitoring activity and sets out a brief summary of the recent sectoral work carried out by ESAs in the area of automation in financial advice. It also sets out the main results of the monitoring exercise on the evolution of the market in automation in financial advice, along with the related regulatory or supervisory activities in the different member states or sectors.
The report shows that the previously identified (by ESAs) risks and benefits of this phenomenon have largely been confirmed by national competent authorities and remain valid. In examining the emerging business models, ESAs found that automated services are being offered, through partnerships, by established financial intermediaries, rather than by pure fintech firms. Additionally, the emerging trends include the use of Big Data, chat bots, and a broader range of products. ESAs concluded that, given the overall importance of automation in financial advice and the emergence of ongoing changes to business models, a new monitoring exercise will be conducted if and when the development of the market and market risks warrant this work.
Keywords: Europe, EU, Banking, Insurance, Securities, Fintech, Financial Advice Automation, ESAs
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