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Cyborgs Are Better Than Robots


Matthew Josefowicz

The news that prominent robo-adviser Betterment is adding human advisers to offer additional services to clients isn’t terribly surprising. But although robo-advising may not be sufficient to scale a large company on its own, it has become an important service offering in its industry very quickly. Traditional players like Schwab and Vanguard offer their customers automated allocation as well as human investment advisers, and now Betterment does too.

Some of the media coverage of this move has had a ring of Luddite triumphalism to it, as if Betterment’s folly in trying to build a wealth management company based on robots has been justly punished for its hubris. But this story merely repeats a pattern we’ve seen multiple times over the past few decades when new technologies are introduced into financial services. Techy new entrants introduce a new service and prove a market need, the incumbent players adopt the technology and offer competing services, and the new entrants adapt to compete or die. The important part of the Betterment story is not that they failed to build a 100% robot company, it’s that they proved that robo-advising is an important offering in the wealth management market.

Similarly, recent stories about robotic automation and the use of AI in insurance have focused on the notion of robots taking over from people, setting up an us-or-them framework between people and technology. But this unnecessary dualism detracts focus from the most important challenge facing knowledge industries — combining human understanding and emotional awareness with automated data access, analytics, and transaction processing speed.

Robots may be better than humans at some tasks, but cyborgs — technologically-enhanced humans — are better than robots.

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About Matthew Josefowicz

Matthew Josefowicz is the President and CEO of Novarica. He is an expert on insurance and financial services technology, with two decades of experience advising CIOs on IT strategy and solutions. He has written more than 100 reports on insurance technology issues and is the lead moderator of the Novarica Insurance Technology Research Council. Prior to launching Novarica in 2007, he founded and led the global insurance group at analyst firm Celent and worked at D. E. Shaw & Co., LP. He holds a BA magna cum laude in Classics from Brown University. He can be reached directly at mj@novarica.com.