Robo advisors might exacerbate financial volatility and pro-cyclicality if the assets under management reach a significant level, which is not yet the case. Traditional banks in many countries are currently suffering from dwindling profitability due, most notably, to the low-interest-rate environment. Disintermediation, however, could intensify the problems of narrow profit margins.
As in a jigsaw puzzle, each institution represents a piece whose absence will leave gaps that could adversely affect our proper appreciation of particular scenarios. This could potentially lead to weak or even wrong policies. It is important therefore that we keep on working together to gain clear perspectives that give rise to appropriate and timely policies.