Banks' robo-advisers are facing increasing scrutiny

With financial institutions increasingly employing roboadvisers, China's central bank and financial regulators issued draft regulations for comment recently, requiring financial institutions to receive regulatory approval for offering such services.

The regulatory authorities said financial institutions should create rational investment strategies and algorithm models, as well as remind investors of the flaws and risks associated with algorithm-based robo-advisory models.

Financial institutions are also required to report to the regulators the principal parameters of their advisory models and the main logic behind their asset allocation.