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The Contribution of Robo-Advisors as a Key Factor in Commercial Banks’ Performance After the Global Financial Crisis

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  • Félix Zogning

    (School of Management, Université de Sherbrooke, Sherbrooke, QC J1K 2R1, Canada)

  • Pascal Turcotte

    (Canadian Imperial Bank of Commerce, Toronto, ON M5J 0E7, Canada)

Abstract

In several countries, digital financial advisory services, particularly those supported by robo-advisors, are becoming increasingly popular in retail banking. These tools assist users with financial decisions such as risk assessment, portfolio selection, and rebalancing—all at a reduced cost. Recent studies suggest that, over time, robo-advisors could complement human financial advisors. Building on this research, which evaluates robo-advisors’ effectiveness in asset allocation, this study aims to assess the impact of this strategic shift on retail banks’ profitability. It compares the Canadian and French banking sectors, where robo-advisors were introduced in the 2010s. Results indicate that implementing robo-advisors enhances profitability in non-interest activities, with this effect being more pronounced in France than in Canada.

Suggested Citation

  • Félix Zogning & Pascal Turcotte, 2024. "The Contribution of Robo-Advisors as a Key Factor in Commercial Banks’ Performance After the Global Financial Crisis," FinTech, MDPI, vol. 4(1), pages 1-15, December.
    • Handle: RePEc:gam:jfinte:v:4:y:2024:i:1:p:2-:d:1554791
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    References listed on IDEAS

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    1. Schepens, Glenn, 2016. "Taxes and bank capital structure," Journal of Financial Economics, Elsevier, vol. 120(3), pages 585-600.
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