This article first appeared in Personal Wealth, The Edge Malaysia Weekly on January 7, 2018 - January 13, 2018

This year has seen the introduction of robo-advisors version 1.0, but it has largely been about back-office automation and building scalable software. Next year will see robo-advisors 2.0, where artificial intelligence (AI) is used to help customers set and achieve goals.

This is the direction that AI can take us. Imagine a 25-year-old woman living in Kuala Lumpur. Her goal is to buy an apartment. Using peer data, the robo-advisor will be able to identify what she can afford based on her age, income and location. When she has begun her recurring monthly investment towards her goal, she can be notified of her progress on demand. Six months before she is forecast to achieve the goal, the robo-advisor will send her a list of the most popular agents based on her peer ratings. After she has completed her goal, she can purchase a personalised home insurance policy using the app.

A robo-advisor can help you save for your goals and deliver solutions to fulfil them. It is constantly learning and never sleeps. All of this is delivered through an interactive dialogue.

There is a misconception that robo-advisors are in competition with wealth managers and private banks, but that is not the case. The real innovation with 

robo-advisors is access. We are giving 95% of the population access to high-quality investments that they were previously locked out of due to high minimum investment amounts and fees. Our customers are mostly millennials investing for the first time.

Mikaal Abdulla is  co-founder and CEO of 8 Securities

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