Emotions in Robo-Advisory: Understanding Biases, Designing Sensitive Platforms, and Enhancing User Experience through Emotional Intelligence
Sharmila VP -, Bhartendu Singh - · International Journal For Multidisciplinary Research · 2024
Introduction: Robo-advisory services revolutionize investment management by providing automated, data-centric solutions, utilizing vast data sets to tailor investment plans to individual client needs. However, the importance of emotions in investor behavior is still a crucial but sometimes disregarded feature of these systems. By using automated procedures and computational calculations to provide customized investment options, robo-advisors have completely transformed the investment management industry. Purpose: The article explores how robo-advisory services can improve investor outcomes by addressing emotional biases in investment decisions. It proposes emotionally intelligent robo- advisors that understand investor sentiment and addresses challenges, empowering investors to achieve long-term financial goals. Methodology: The article explores the challenges of integrating emotional intelligence into robo- advisory services through a comprehensive review of the existing literature, focusing on behavioral finance and empirical evidence to understand the practical implications of irrational behavior through reviewing case studies and empirical evidence. Result: The study suggests a multi-faceted approach for designing emotionally intelligent robo-advisors, considering technological innovation, regulatory compliance, ethical considerations, and user engagement strategies, addressing challenges like algorithmic biases, privacy concerns, and regulatory compliance.