Declaring “easy answers” about how robo-advice will evolve and be regulated is “premature” in the current market, according to Paul McNamara.
Speaking on the FTAdviser podcast, Mr McNamara, chief executive of the fintech group Evalue, said companies that claimed to be robo-advisers at this point in time were “not the ultimate model” and would continue to evolve.
He was discussing the issue of regulation and the challenges businesses faced within the robo-advice space with Ben Taylor, chief technical officer at AI group Rainbird.
Mr Taylor said: “Regulation will look very different depending on what type of robo-advice is being used.
“It might be that we’re using statistical methods to do some prior analysis of data to do future predictions.
"Regulating that would be a very different kettle of fish to regulating some sort of human type reasoning, which you could explain.
“It depends on the underlying technology and what the customer outcomes are expected to be.”
Earlier this year Christopher Woolard from the Financial Conduct Authority said there was a growing consensus that AI in financial companies needed to be ‘explainable’ but that it was up for debate at what level that explanation needed to be — an expert, a chief executive or the consumer themselves.
Mr Taylor and Mr McNamara also discussed why robo-advisers had come and gone in recent years and why some seemed unable to make a profit, as well as the type of consumer they expected to opt for robo-advice in the first place.
Each week, FTAdviser is joined by guests from the industry to discuss pressing industry issues.