Robo-Advisors (Automated Investment) and Their Role in Developing Investment Services: Evidence from Global Markets

الملخص

Background: The rapid proliferation of financial technology (FinTech) has fundamentally transformed investment services. Robo-advisors — automated digital platforms leveraging AI, machine learning, and algorithmic portfolio management — manage approximately $2.76 trillion in assets globally (2023) and are projected to exceed $5 trillion by 2027.
Objectives: This paper investigates the role of robo-advisors in transforming investment services, examining their technological architecture, economic impact, regulatory challenges, and performance relative to traditional advisory models, with particular focus on Arab financial markets.
Methodology: A systematic literature review (SLR) was conducted following PRISMA 2020 guidelines. From an initial pool of 1,433 records across Scopus, Web of Science, EBSCO, SSRN, and supplementary grey literature, 87 studies were included after multi-stage screening and quality assessment using the CASP framework. Quantitative data were synthesized through narrative and comparative meta-analysis.
Results: Robo-advisors deliver significant improvements in portfolio diversification, cost efficiency (fee reduction: 60–80%), and after-tax returns (TLH benefit: +0.7–2.1% annually). Return performance was comparable to traditional advisors (net Sharpe ratio advantage: +0.26). Adoption barriers in Arab markets include regulatory gaps, low financial literacy (27–44%), and cultural preferences for relationship-based advisory.
Conclusion: Robo-advisors represent a paradigmatic shift in investment services. Hybrid human-AI models, robust regulatory frameworks, and Shariah-compliant platforms are key enablers for sustainable development in both global and Arab markets.