Tom Baker is William Maul Measey Professor at the University of Pennsylvania Law School, and Benedict C.G. Dellaert is Professor of Business Economics at Erasmus University Rotterdam. This post is based on their recent paper.
The growth of investment robo-advisors, web-based insurance exchanges, on-line credit comparison sites, and automated personal financial management services creates significant opportunities and risks for consumers that regulators across the financial services spectrum have yet even to assess, let alone address. Because of the scale that automation makes possible, these services have the potential to provide quality financial advice to more people at lower cost than humans, and to do so with greater transparency. But the fact that this potential exists hardly guarantees that it will be realized.