Robo-advisory services in Malta : the outlook of practitioners and potential customers

Abstract

Robo-advisors are one of the most recent innovations brought about by e-banking. It is an online setup using little to no human surveillance and offers customers investment advice. Robo-advisory services were first introduced in 2008 and started to gain their popularity in 2010. The main aim of the following research is the use of robo-advisory services in the Maltese Islands both from a client’s perspective and from the bank representative’s perspective. These issues were investigated through two main empirical tasks. Research about the client was collected by means of a questionnaire which was made available on social media mainly Facebook groups. On the other hand, research about bank representatives was collected by means of interviews, both face-to-face and via e-mail. In total a number of 176 questionnaires and 8 interviews were conducted. It resulted that the majority of people in Malta lack basic knowledge on the use of robo-advisory services but on the other hand the same majority are willing to try out such a service if the need arises. On the other hand, from the practitioner’s point of view, it turned out that such services are increasing in Malta. It could also be concluded that although the service is at an increase it is hard for the traditional service to become obsolete due to two main reasons: people over 50 years of age are not willing to cater for their financial needs online and some financial matters which are complex will always require the human element.