| The essence of the difference between Robo-advisors and traditional manual investment advisers lies in the application of algorithms.Algorithms are continuously coupled with the financial market,resulting in the formation of special algorithm risk.That is,in the dynamic financial market,due to improper application of algorithms or the negative characteristics of the algorithms themselves,Robo-advisors may deviate from the preset goal.The reasons for the characterization of Robo-advisor algorithm risk are incomplete and inaccurate data,the convergence characteristics of the algorithm itself,and artificial design.For Robo-advisors,data drives investment,trading and hedging decisions.Incomplete and inaccurate data may lead to misunderstandings in the Robo-advisor’s algorithm model,resulting in algorithmic risks.At the same time,the convergence characteristics of the algorithms themselves will cause the Robo-advisor algorithms with price signals as the transmission mechanism interact with each other,resulting in algorithmic risks and spreading to the entire financial market.Both of these are essentially due to the algorithmic risks arising from the application of algorithms as a new technology in the financial market.However,artificial design is different.Artificial design is the intervention factor of intelligent investment operators or designers,but such artificial design is hidden under the black box of the algorithm,which makes financial consumers deviate from their goals under the manipulation of algorithms and induce algorithm risks.There are reasons behind the different representations of algorithmic risk in different stages of Robo-advisor.In the model building stage,data drives the algorithm.Therefore,the unclear definition of personal financial information,the incompleteness of financial data,and the inaccuracy of financial data lead to incomplete and inaccurate data,resulting in algorithm risks;In the stage of suggestion generation,the consumeroriented expression of Robo-advisor guides the choice of consumers.Therefore,there are conflicts of interest in Robo-advisors,the algorithm black boxes that cover up conflicts of interest,and the explanation beyond the understanding of financial consumers,which lead to the algorithm risk;In the decision output stage,the recommendations of Robo-advisors really fall into the financial market.And due to the convergence of the underlying logical architecture of the Robo-advisor algorithms,the convergence of the Robo-advisor algorithms used in the market,and the typed working method of Robo-advisor algorithms,leads to the development of algorithmic risks.The reason for risk characterization of Robo-advisor algorithm risk seems more similar to technical problems,but there are legal defects behind it.Moreover,as a financial service that is practically applied to the financial market,the law is bound to respond and guide the development of Robo-advisors with algorithms as the core.This is not only the requirement to protect financial consumers,but also an inevitable requirement for standardizing and protecting the sustainable development of Roboadvisors.Taking into account the requirement of sustainable development,it is also an inevitable requirement of stabilizing the financial market.From a legal perspective,the incomplete and inaccurate of data are due to the unclear ownership of data and the legal dilemma of financial data monopoly.That is,the unclear definition of personal financial information,the unclear content of enterprises’ rights and interests to data,and the conflict of interests between data rights protection and data sharing,which need to be clarified by law.Behind the characteristics of algorithm convergence is the weakness of the algorithmic risk prevention system caused by algorithm convergence.That is,the algorithm differentiation system is difficult to achieve,and the manual intervention obligation is too principled,making it difficult to implement the algorithm convergence prevention of the Robo-advisor platform.Behind the artificial design factor is the legal dilemma of robo-advisor disclosure.That is,the contradiction of the algorithm transparency system,the incompatibility of interest conflict prevention system and theinsufficiency of disclosure forms.Therefore,it is necessary to start from the three directions of data,algorithms and information disclosure.Firstly,promoting the flow and sharing of data by perfecting personal financial information classification standard,improving the data rights distribution system,and improving the data sharing system.Secondly,through establishing algorithm convergence fuse system and implementing the obligation of manual intervention to improve the prevention system of algorithm convergence characteristics.Last but not least,the algorithm transparency system can be improved by improving the system design of algorithm reporting,strengthening the requirements of robo-advisor interest-related information disclosure and strengthening the requirements of information disclosure forms. |
