Banks are lining up behind Capital One to launch robo platforms even as they gird for an initial hit to their brokerage business, say industry analysts.
Banks need the platforms to expand relationships with customers and keep them from going to rivals offering the automated services they seek.[…]
Overall, analysts applauded Capital One’s hybrid robo model, saying that blending technology with human advisers was the right approach. They also commended Capital One for being on the early edge of implementing the technology and leading the way for other banks.
Some analysts, however, questioned the pricing, saying it was expensive, even for a robo with access to human advisers.
“It’s on the high side,” says Wayne Cutler, an executive vice president at analytic advisory services firm Novantas.
Cutler noted that at 90 basis points it was close to what live advisers charge for their services. “I expected the hybrid to be close to 60 – 65 basis points,” he says.
Analysts agreed that the offering would evolve over time, with pricing options and new bells and whistles added down the road.
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