Dynamics of Robo-Advisory Financial Services in Saudi Arabia

Purpose: The study identifies benefits and limitations associated with robo-advisory services. It also presents the current robo-advisory industry of Saudi Arabia and evaluates its financial performance using multiple indicators from 2017 to 2029. Methodology: This paper conducts a systematic review to identify the advantages and limitations of robo-advisory services, followed by a comprehensive thematic analysis. It also performs a secondary data analysis to examine the performance of robo-advisory industry in Saudi Arabia. Findings: The financial services could benefit from adopting robo-advisory services, which offer cost-effectiveness, increased accessibility and scalability, automation, better risk profiling and objectivity. The key limitations of adopting Robo-advisory services include algorithmic bias, a lack of trust and transparency, legal and regulatory issues, privacy and data security concerns, and limited financial literacy. The study shows that the Saudi robo-advisory sector is predicted to record revenues of $34.56 million by 2025, with the penetration rate in the market expected to remain steady after 2022 due to market maturity. However, the assets under management have grown slowly since 2021. Implications: The study recommends regulatory support and framework enhancements for the sustainability of the industry. A greater focus on technology investment, innovation, and financial literacy is needed.