European banks will start using roboadvisers next year, says Morgan Stanley
Roboadvisers are on the verge of making a huge entrance into Europe's banking sector, according to Morgan Stanley.
In an outlook report by its EMEA analysts, the company said it expects high-street banks across the continent to start adopting the robotic finance experts as soon as next year, as they face intense pressures to cut costs.
Using artificial intelligence instead of humans will drastically reduce the amount of money banks need to spend on providing their clients with tailored advice.
Read more: Robo-advisers backed to fill financial gap
"We expect several European banks will launch trials of roboadvice in 2016 to harness their brand/trust with best in class technology," Morgan Stanley said in a note to the FT.
They is likely to be fuelled by the success of US asset manager Vanguard's robo-advisor (PFA) which has grown in one year to be 6 times larger than its nearest new entrant competitors.
The analysts also expressed a positive view of how financial regulation will impact banks from now on. "The last few months have delivered plenty of bad news from banks about their current guess of financial regulation," they said. “It may be the worst is now behind us.”
Taking a more negative tone, however, they warned that those expecting large dividends from UK banks are likely to be left disappointed.
Dividends from UK banks will disappoint more than their peers in Europe because of regulatory pressure.