Latin America Robo Advisory Market Definition

Robo-advisors are financial advisors that anticipate financial advice and online investment management with the least possible human arbitration contingent on mathematical rules or algorithms. Algorithms in Robo-advisors are designed by data scientists, financial advisors, and investment managers, and are coded in software by programs. Using its algorithms, the software automatically administers, directs, and enhances clients’ assets for either long-run investment or short-run investments.  A Robo advisor first collects the data about the customer and invests for the customer accordingly.

Global Latin America Robo Advisory Market: Key Insights

Global Latin America Robo Advisory Market Highlights Over 2023 - 2035

The global Latin America Robo advisory market is estimated to garner a revenue of USD 121 Billion by the end of 2035 by growing at a CAGR of ~32% over the forecast period, i.e., 2023 – 2035. Further, the market generated a revenue of USD 5 Billion in the year 2022.  A Robo-advisor is a software robot that delivers financial advice based on artificial intelligence (AI). They first collect the data about a customer and invest in the customer accordingly. The primary factor driving the Latin America Robo advisory market is the effective use of automation in the financial sector. For instance, the interaction between robots and humans in the banking sector has been predicted to cross 89% by 2022.

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The implementation of automation saves more than 19% of the time spent by CEOs on financial tasks. And soon, the incorporation of automation and AI should result in up to 20% of banking tasks being handled by robots. All of this point to rapidly developing Robo-advisory trends.

Latin America Robo Advisory Market: Growth Drivers and Challenges

Growth Drivers

• Increasing Number of Users of Robo-Advisors – The number of users of Robo-advisors is expected to surpass 21 million by 2027.

• Growing Investment in Machine Learning in the Finance Sector – The overall budget for machine learning (ML) is increased by more than 24% with the greatest benefit being that of banking along with manufacturing and IT.

• Rebounding of Foreign Direct Investments (FDIs) in Latin America – According to the United Nations Conference on Trade and Development, by June 2022, the FDI to Latin America and the Caribbean has rebounded at a rate of 56% after the slump during the pandemic. In 2021, the FDI amounted to USD 34 billion. The rebound is primarily attributed to the announcement of more than 300 greenfield projects in information and communications technologies in the Latin American and Caribbean regions.

Challenges

• Potential Negative Impact on the Charge Levied on Each Customer – Consequences such as lean opinions towards financial situations, limited personalization, and others are the obstacles to the growth of the market. 

• Limited Flexibility Related to the Services of a Robo Advisor

• Barriers to Consultations Between the Investors and the Financial Advisors             

The Latin America Robo Advisory Market is segmented and analyzed for demand and supply by type into hybrid Robo – advisors and pure Robo-advisors. Between these, the hybrid Robo-advisors segment is anticipated to hold the largest market size by the end of 2031. Hybrid Robo advisors are a combination of the conventional Robo advisory services, along with a human touch in the form of planning and financial guidance through video calls or phone with human advisors. It was estimated that in the first half of 2020, about 8% of black Americans and ~5% of white Americans got in touch with their bank advisors through video calls.  Thus, incorporating digital media to financial advice is the significant factor driving the segment’s growth. The hybrid Robo type is also preferred for the additional reassurance and support, low price, and flexibility in the form of self-service.

Market Segmentation

Our in-depth analysis of the Latin America Robo Advisory Market includes the following segments:

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Key Companies Dominating the Latin America Robo Advisory Market

Our report has covered detailed company profiling comprising company overview, business strategies, key product offerings, financial performance, key performance indicators, risk analysis, recent developments, regional presence, and SWOT analysis among other notable indicators for competitive positioning. Some of the prominent industry leaders in the Latin America Robo Advisory Market that are included in our report are Betterment LLC, Wealthfront Corporation, Personal Capital Corporation, Charles Schwab & Co., Inc., Future Advisor, FMR LLC, M1 Holdings Inc, SigFig Wealth Management, LLC, The Vanguard Group, Inc., Fincite Gmbh., and others.

Latin America Robo Advisory Market: Latest Developments

• February, 2022: Wealthfront Corporation – announced the acquisition by the Swiss bank USB Group AG for USD 1.4 billion. After the acquisition, Wealthfront is functioning as a foundation for USB’s digital offering.

• January, 2022: Betterment LLC – announced having helped almost 700,000 clients primarily with the help of automated tools in allocating investments.

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