Bank of Scotland  

RBS plans to roll-out robo-advice

RBS plans to roll-out robo-advice

The Royal Bank of Scotland expects to be in a position to make a decision on the roll-out of robo-advice for mortgages by the end of the third quarter of 2017.

RBS is currently engaged in a trial of the technology, which could help it to cut costs as it strives to regain profitability amid the ongoing fall-out from the financial crisis.

Automation is seen by the Financial Conduct Authority as a means of bridging the ‘advice gap’ – providing assistance for people unable to afford the services of an IFA – but there are fears it could lead to job losses in the sector as human advisers are gradually undercut.

Lloyd Cochrane, director of mortgages and protection at RBS, told FTAdviser: “Robo-advice helps us to reduce cost and risk. We are in that space and thinking quite deeply about how it is working in practice. By the end of quarter three, we should be able to say whether it will work across the UK

“We are interested in ‘robo-help’. What I am not sure is sensible is saying something is robo-advice at the start of the experience.

“It will depend on what the customer wants to do - that has informed everything we have done so far. It is some really simple stuff that trips you up: if the customer wants to go to the loo or wants a cup of tea. – they are really trivial things, but if you focus on video in branch it will not work.

“We have continued to use our digital tools to go from ‘curious about buying a home’ to ‘serious about buying a home’ and make that as digital as possible. That is at the customer’s control. If at any point they want to speak to a human, they can put their hand up and get hold of a human.”

Almost a decade on from the financial crisis, RBS continues to deal with the consequences of bad lending, which have led to losses of £58bn since its £45.5bn bailout in 2008.

At the end of February, the taxpayer-owned bank announced £7bn-worth of losses in 2016, and the bank is bracing itself for further sanctions in 2017.

Despite these ongoing problems, Mr Cochrane is optimistic about the bank’s prospects.

“The core business is doing well, but the bank is still dealing with the corporate hangover from the financial crisis,” he explained.

“There is nothing particular in the mortgage business that will be influenced by what is happening at the corporate level. From a corporate point of view, it has been a real success story in supporting the economy and customers.”

Oliver Marley, head of mortgage research at London-based Independent James, said: “Robo-advice is a good concept, and there is nothing wrong with exploring different avenues to make things more convenient for customers, but when you are going down this route can you be 100 per cent sure you are giving people the right advice?