Technavio analyzes that the Robo Advisory Services Market is expected to grow at a CAGR of 9.16% during 2023 and 2028. During this period, the market is also expected to show a growth of USD 1306.37 billion.There are various factors that contribute to the growth of the market. The robo-advisory market is experiencing significant growth due in part to the increasing adoption of artificial intelligence (AI) and machine learning (ML) technologies. These advanced technologies enable robo-advisors to provide personalized investment recommendations and manage portfolios more efficiently than ever before. As a result, more investors are turning to robo-advisory services for their investment needs, driving market expansion. The integration of AI and ML in robo-advisory services offers numerous benefits, including improved risk management, enhanced customer experience, and increased accuracy in investment decisions.
High net worth individuals (HNWIs) seek efficient and cost-effective solutions for managing their wealth, leading to the increasing popularity of robo advisory services. Robo advisors, including pure, hybrid, and fintech variants, offer lower fees compared to traditional wealth management firms, making them attractive options for HNWIs. These platforms provide 24/7 access to investment management tools and services, enabling personalized investment strategies based on individual risk tolerance, financial goals, and preferences. Transparent reporting and easy-to-understand analytics empower HNWIs to closely monitor their investments and make informed decisions. The ability to maintain control over their portfolios while leveraging automation is a significant appeal for HNWIs.
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Robo Advisory Services Market Segmentation
As per our research findings, here are some of the key competitors that are leading the industry
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In the realm of digital wealth management, Robo-advisors emerge as automated financial experts, providing algorithm-driven wealth management services. These online platforms utilize an online questionnaire to offer personalized financial advice based on client assets and business models. Robo advisory services leverage digital technology, Artificial Intelligence, and human intervention to cater to the needs of consumers, particularly Generation X and millennial generations. However, with increasing adoption comes potential cyber threats, necessitating robust security measures. Passive investors can benefit from these services offered by platforms like Wahed Capital, Wealthfront, and Betterment, which employ AI for portfolio management and inflation mitigation in the retail banking sector.
The robo-advisory services market represents a segment of the global application software industry, which is a sub-segment of the larger IT software market. According to Technavio, this market encompasses businesses specializing in algorithm-driven, automated wealth management services. The IT software market comprises companies involved in software development and production, including application software and system software. The application software market specifically focuses on creating software for business or consumer applications, such as enterprise software and cloud-based solutions. It excludes entities producing interactive home entertainment software or system software for database management.. Industries are leveraging the products belonging to the market for customer engagement, transactional notifications, and promotional offers.
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