Deutsche Bank has demonstrated the demand for digital wealth management by adding a robo-advisor to its online investment platform.
The bank said in a statement this week that it is expanding maxblue, an online investment platform, to include the AnlageFinder robo-advisor which has been developed with fintech company finite. The robo-advisor uses algorithms to put together individual portfolios for investors.
Markus Pertlwieser, chief operating officer, private & business clients, at Deutsche Bank, said in a statement: “With our AnlageFinder robo-advisor, clients can professionally put together their portfolios and optimise their investment outcomes with just a few clicks. This investment tool helps Deutsche Bank position itself for the digital natives among its clients who are keen on seizing the opportunities offered by capital markets.”
AnlageFinder can develop a customised asset allocation based on individual risk profiles which may include active and passive funds and clients can use maxblue to place securities orders.
In August this year BlackRock agreed to acquire robo-advisor FutureAdvisor. Tom Fortin, head of retail technology for BlackRock, said at the time: “As demand for digital wealth management grows, we believe that our combined offering will accelerate our partner firms’ abilities to serve the mass affluent in a convenient, scalable way.”
Camilla de Villiers at Thomson Reuters wrote in Markets Media this month that robo-advisors gathered $427m venture capital funding last year and attracted $19bn of assets under management but still comprise just 0.38% of the $5 trillion retail market for financial advice.
Consultancy Oliver Wyman said in a report that asset management, is lagging behind other industry sectors in terms of digital penetration while new approaches will all depend on the smart exploitation of data, machine automation, electronic access and/or distribution channels. The report said digital technology will influence every aspect of the asset management industry.
“If you consider every place where a human has to make a decision, whether that is how to service a customer, select a security, build a portfolio or execute a trade, you have to assess how digital will impact that decision,” added Oliver Wyman. “This is why the digital revolution is so all-encompassing – it has the potential to impact the way in which every decision is made in an organisation and thereby remould the entire asset management activity chain.”
The consultancy predicted that asset allocation and client advice will draw closer together as clients demand specific investment solutions rather than generic products and portfolio construction will also combine with trading to become more automated.
However the advance of technology will not end the human side of asset management. “Rather, the way humans can create value beyond an automated approach will be redefined and new business models will combine the best of human and automated features,” said Oliver Wyman.
Featured image by Tatiana Shepeleva/Dollar Photo Club
