Generative artificial intelligence (AI), autonomic systems and privacy-enhancing computation are three technology trends gaining traction in banking and investment services in 2022, according to Gartner, Inc. These trends will continue to grow over the next two to three years, contributing to growth and transformation of financial services organizations, it said in a statement. "While growth is the top priority, the need to manage risk, optimize costs and increase efficiency also requires new technology innovations," said Moutusi Sau, VP Analyst at Gartner. "Generative AI enables bank CIOs to offer technology solutions to the business in pursuit of revenue growth, while autonomic systems and privacy-enhancing computation are long-term solutions that provide new options for business transformation in financial services." IT spending by banking and investment services firms is forecast to grow 6.1 percent in 2022 to $623 billion worldwide.

Robo advisors, a class of financial advisor that provide financial advice or investment management online with moderate to minimal human intervention, are growing in popularity. These provide digital financial advice based on mathematical rules or algorithms to automatically allocate, manage and optimize clients' assets. This allows these companies to provide more affordable and accessible services. Unlike conventional asset management services which require large amounts of investment capital, digital asset management services can be obtained starting with much lower investment capital, sometimes only a few hundred bucks, other times, a few thousands. The robo advisor develops a personalized portfolio for clients and then monitors it 24 hours a day, 7 days a week.

A funny thing happened on the way to the robo-adviser revolution. Robo advisers--automated investment services that assess risk tolerance and manage a portfolio of exchange-traded funds at a low cost--are running into the realities of the highly competitive wealth-management market, including thin profit margins. So they are expanding in areas that didn't used to be associated with robo advisers, including managing "529" college-savings plans, administering 401(k) retirement accounts and adding account features that involve partnerships or co-branding deals. In effect, as traditional brokerage firms challenge the robos with their own lost-cost offerings, the robos are evolving. For individual investors, this evolution is blurring the line between the robo advisers and the more traditional investment firms such as Vanguard Group, Charles Schwab Corp. SCHW -0.74 % and Fidelity Investments, which are quickly adding automated services.