Robo Advisors as a Use Case of AI Systems: Linking Responsible Business Practices, Compliance and Outcomes

In this paper, we explore the workings of robo-advisors as an example of AI-based systems.

We discuss the performance and challenges of robo-advice, as well as offer reflections on how and why robo-advice as part of the broader fintech and financial services sector intersects practices in AI systems, regulation and compliance. We draw attention to the implications for explainable AI, the role of humans in the loop, compliance and business practices.

Our approach focuses on how the AI capabilities in robo-advisors can help to build responsible business practices and compliance elements into operating models and business processes. We explore how these interactions apply to selected use cases in the UK and discuss implications for improvements in responsible business practices, regulations and consumer/client outcomes.