Do you believe it impossible for a robot to replace you at your job? A recent study by McKinsey Quarterly mentioned that nearly 50% of jobs employees are paid to do may soon become completely automated. Now, as much as 58% of tasks are done by robots.
This number may increase if robots advance quickly, with such technology as speech recognition. Perhaps the most surprising discovery in the study showed that a large percentage of people complete their work in a routine and fixed manner. Only four percent of people who are employed in the US complete tasks that demand a higher level of creativity. The study is different from previous ones that looked at automation by focusing on activities, not by occupation.
Automating tasks, in general, can and is transforming how corporations hire people. Most obviously, companies want to lower expenses. A study conducted by McKinley & Co stated that using automation can also improve quality of and how tasks get performed at “superhuman” speeds. Currently, around 60% of jobs could have a minimum of 30% of their work activities automated regardless of the type. The study added that any activity that uses over 20% of a CEO’s working time has the possibility of being automated.
Even though you can automate things, it doesn’t necessarily mean that you should. The study stated that there was a massive organization inertia that can use up a lot of up-front investment. Even though it can beneficial to having robots, it’s likely not going to take over because there are just some things a robot cannot do. Nevertheless, there are people, companies alike who would enjoy having things more automated. For example, Bank of America plans to increase the number of robots they use. The company will make hundreds of their employees work on an automated investment prototype. The company states it’ll be used specifically for accounts that are under a quarter of a million dollars. The bank plans on releasing the system sometime in 2016.
Plenty of banks look at “robot advisors (that used algorithms to produce the best investment advice digitally) as a new technology to attract young investors in particular.
How it works is that investors give their age, goals, risk tolerance and income via an app or website. Algorithms suggest investments and frequently rebalance them, such as when they notice losses due to tax efficiency. Without people as advisors, these companies can charge yearly fees as low as 0.5%, which undercuts full-service brokers who charge almost double. A $200,000 investment could save $100,000 over two decades.
Several banking companies plan to provide these for customers. John Shrewsberry Wells Fargo’s chief financial advisor said that their company largely focuses on producing a high-value person-to-person interaction, which is not something that everyone enjoys. Shrewsberry also stated that there will be generations of future investors who will use robot advisors. A representative at the Bank of America added that a robot advisor can complement the guidance and advice a financial planner offers.
Bob Hedges, who is partnered with A.T Kearney, mentioned that the difference in numbers to the consumer is so dramatic, it’s impossible for anyone to ignore. He predicts there will be an increase of $300 billion in assets by the end of 2016. The company believes that implementing the robot advisors would give them another $2.2 billion by 2020.
Morgan Stanley stated that robot advisors are putting common sense into a user-friendly model, and that companies should really look into this technology. Regardless of the many benefits that robot advisors will bring to them, bank executives, just as McKinsey Quarterly, don’t believe that they will take over the jobs that people hold anytime in the future. Wealthy clients require estate plans, tax advice, or complex financial arrangement and one that these systems aren’t likely able to help with. Just like a luxury real estate seller offering a cheaper base model to people, robot advisors can be used as a gateway to the firm’s higher priced offers.