Trequattrini warns automated advice can amplify systemic risks
Bank of Italy Deputy Governor Gian Luca Trequattrini warned that shared algorithms and concentrated technology providers create systemic risks. Speaking at Italy’s financial adviser supervisory body's anniversary conference in Rome, he called for stronger controls.
Digital reach, concentrated adoption
Italy has over 12 million direct mutual fund investors; 40 percent use financial advisers.
Open-end fund assets exceeded €1.3 trillion in 2025; advisory networks oversaw over €1 trillion, with record net inflows of €62 billion.
European digital ETF savings plans are projected to reach 32 million by 2028.
A Bank of Italy survey found 15 percent of Italian adults use robo-advisers, particularly those with strong digital but limited financial skills.
In 2024, 6 percent of banks offered robo-advice to smaller investors: they held 40 percent of securities in custody, with users' assets totaling €3 billion.
Another 8 percent offered automated support for advisers, covering 45 percent of securities in custody.
Low-cost neo-brokers offer execution without advice.
Shared models, shared vulnerabilities
Trequattrini warned that common algorithms can synchronize recommendations and amplify widespread selling under stress.
Dependence on a few technology providers adds contagion risks.
The Digital Operational Resilience Act requires mapping critical dependencies, contractual safeguards for data portability and service continuity, and credible exit strategies.
Controls must assess suitability and incentives, not just paperwork.
Blockchain also brings protocol and governance risks, while decentralized finance leaves users bearing risks without central guarantors.
Trust remains a human responsibility
Trequattrini said advisers must understand algorithmic recommendations and reject them when unsuitable.
Disclosure under MiFID II cannot substitute for professional integrity.
He called for public investment in financial education and stronger professional standards, rather than a regulatory response alone.
Source: The outlook for financial product distribution
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