Frankfurt, 14. September 2017: Two pioneers of financial services have started working together: ING-DiBa is expanding its retail banking offering by including online wealth management, delivered by Scalable Capital. It’s a partnership between Germany’s third biggest bank in terms of number of customers and its leading online wealth manager. The offer is available to all ING-DiBa customers from 15 September 2017.
“Scalable Capital’s online wealth management enables us to offer our customers a highly attractive and comfortable way of investing. This move is in line with our strategy to deliver the best and most cost-effective financial services to our customers through advanced digitisation”, says Nick Jue, CEO ING-DiBa AG and Head of ING Germany, Austria & Czech Republic.
Erik Podzuweit, founder and CEO of Scalable Capital, commented: “ING-DiBa is the ideal partner for us. When it comes to digital innovations, they act exceptionally quickly and decisively. In addition, they will give us immediate access to more than eight million customers.”
A Pioneering Partnership
The partnership between ING-DiBa and Scalable Capital is the first fully integrated partnership between a major German bank and an online wealth manager. Over the past 12 months, several teams have worked hard to integrate Scalable Capital’s service into ING-DiBa’s technical infrastructure. The result is a very customer-friendly offering: ING-DiBa customers can register in less than 15 minutes using an entirely paperless process.
Scalable Capital, regulated by the Bafin, ensures the suitability of each individual customer. To do this, ING-DiBa customers are directed to the Scalable Capital website. All further registration steps, such as input of personal data and legitimation, are eliminated for ING-DiBa customers. ING-DiBa is the custodian bank. Customers can monitor their portfolios and all account details, such as performance and fees, on both Scalable Capital and ING-DiBa's mobile apps and online portals.
Risk-Based Investment Approach
Scalable Capital has developed its own risk management technology which provides private investors with access to a risk-based investment approach for the first time. This technology will also be used for ING-DiBa customers.
Scalable Capital begins by determining the individual risk capacity and tolerance of each new customer, then suggests the most suitable risk category from a range of 23. On the basis of this risk profile, Scalable Capital creates a bespoke portfolio of up to 14 ETFs. The portfolio is globally diversified and includes equities, government and corporate bonds, covered bonds, real estate stocks and commodities. Scalable Capital’s ETF selection process is completely independent; if a more suitable ETF is found, the investment universe is adjusted accordingly. Scalable Capital constantly monitors its customers' portfolios and rebalances a portfolio if it threatens to deviate from the customer’s agreed risk category. The asset allocation weightings do not stay constant, but the level of risk in the portfolios does. The minimum investment for customers in Germany is EUR 10,000. The total charge is 0.75% of the average assets under management per year. This includes custody and account management as well as all trading fees. The only other charge is the Ongoing Fund Charge of the ETF providers, which averages 0.25% per year.
ING-DiBa as Pioneer in the ING Group
ING Group may introduce Scalable Capital’s online wealth management into other European markets besides Germany: “Online wealth management is a subject that concerns the entire ING Group. Our German entity serves more than eight million customers with savings and securities portfolios amounting to around EUR 150 billion. This makes Germany one of the most important markets for the ING Group, with significant potential for further growth. For this reason, we have decided to launch our new collaboration in Germany. If our customers value the offering, we will definitely evaluate if we can extend the partnership to other European markets where the ING Group serves private customers,” said Martin Krebs, Head of Global Retail Investment Product Solutions, ING Group.
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About ING-DiBa AG
ING-DiBa has more than eight million customers and is therefore Germany’s third-largest bank. Its core retail banking services include mortgages, current accounts, savings and consumer loans and brokerage. The bank can be accessed by customers 24/7. ING Wholesale Banking takes care of corporate clients, including large, internationally operating companies, the public sector, banks, insurance companies and other institutional investors. Almost 4,000 employees work for ING-DiBa at its offices in Frankfurt (headquarters), Hanover, Nuremberg and Vienna.
About Scalable Capital
Scalable Capital was founded in 2014 and is active in the United Kingdom, Germany and Austria. The UK team consists of Adam French (formerly Executive Director of Goldman Sachs’s Trading Division); Simon Miller (formerly Vice President at Barclays Capital) and Dr Ella Rabener (formerly Founder and CEO of Westwing Russia and Associate Partner at McKinsey & Company). Its unique risk management technology was developed in close collaboration with Professor Stefan Mittnik, PhD, Director of the Chair of Financial Econometrics and Director of the Center for Quantitative Risk Analysis at the Ludwig Maximilian University in Munich.
The company currently employs a team of over 50, many of them experts in financial econometrics and machine learning as well as software engineering. Scalable Capital creates and manages globally diversified ETF portfolios for its clients to help them achieve their long-term financial goals, supported by a proprietary risk management technology. It aims to make investment management cheaper, better and more accessible.
Scalable Capital Limited is regulated by the Financial Conduct Authority (FCA) in the United Kingdom, while Scalable Capital Vermögensverwaltung GmbH is regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) in Germany.