Banks and Robo-Advice: A FinTech Love Affair

By Ella Rabener, Co-Founder of Scalable Capital

Much has been written about robo-advisers as a disruptive force in financial services, poised to displace traditional providers. While it’s true that digital providers are challenging the traditional wealth management model in terms of lower fees, greater transparency and improved user experience, there are actually many ways in which fintech and traditional companies can work together to improve the customer experience.

Established financial services players are waking up to the fact that in order to retain existing customers and attract new audiences, they need to embrace digital. For wealth managers and banks, partnering with a robo is increasingly seen as the easiest, fastest and cheapest route to market.

For the digital provider, pursuing a B2B2C strategy with one or more established providers offers instant access to potentially millions of customers and billions of assets. It accelerates growth  which makes fixed  costs less of a burden and increases the speed to break-even. Partnering with an established brand also lends additional credibility to newer providers; an important asset in a sector that is based on trust.

To achieve this win-win-win scenario for customers, banks, and the digital wealth managers, the established financial player needs to be comfortable that the digital solution to be implemented is sufficiently tailored to meet the needs of its existing customer base while appealing to new audiences. A digital wealth management offering can be a standalone service for a specific (new) target market or it can complement the incumbent’s existing offering, helping them to better service existing customers.

At Scalable Capital, we’ve recently announced our partnership with ING-DiBa in Germany - with over 8 million customers, ING-DiBa is Germany’s third largest retail bank. This cooperation between a major bank and an online wealth manager is a real milestone for our nascent industry, but we are convinced it’s just a start; partnerships between digital and established financial services providers are on the rise. By working with online wealth managers, traditional players can become part of the industry disruption rather than being overwhelmed by it. They can develop and improve their offering to safeguard their future while benefiting customers.

Interested in finding out more about digital wealth management? Join the global community in London on 19th-20th March 2018 to find out more.