The robo advisor has struck the partnership, which will see it provide a white label solution to the firm's digital bank.
Scalable Capital, a leading robo advice firm, will power a new digital investment platform for Openbank, Santander Group’s digital bank in Spain.
The white label solution is the first digital wealth management service for a Spanish retail bank and the firm says it will have a reach of over a million customers.
Openbank, founded in 1995 as a telephone banking service, is a subsidiary of the Santander Group. It was re-launched last year as Spain’s first digital-only bank.
As one of the UK market leaders, also with a presence in several European companies also, Scalable Capital has seen strong traction in growing assets via business-to-business partnerships.
The new Openbank service is named “Invertimos por ti” (“We invest for you” in English) and has been integrated into its online banking platform and is available to their clients in Spain as of today.
“We are not only striving to be the leading digital wealth manager for private investors in Europe, but also to establish ourselves as the European B2B platform of choice for digital wealth management solutions. We are very pleased that Openbank is now using this platform to offer customers digital investment management starting at 500 euros”, said Adam French, Co-Founder of Scalable Capital.
While Scalable Capital has built the technological infrastructure for the robo advisor, BlackRock, the investment bank with a large stake in the firm, delivers the strategic asset allocation for the Openbank portfolios.
Openbank clients can choose from five different risk categories, which hold different asset allocations. In the Openbank investment solution, the underlying investments will be index funds rather than ETFs.
This is due to a preferable tax treatment of index funds in Spain, where no capital gains taxes will be due after portfolio allocation changes among index funds.
A “fractional dealing” service has been put in place to facilitate the trading of fractions of index funds and ensure sufficient diversification of smaller portfolios is still possible. Savings plans can be set up free of charge. In addition, the service will be offered free of charge to Openbank customers until the end of 2018, after which the costs, tiered according to investment volume, will always be less than one percent.
Scalable Capital has also developed “goal-based investing” functionality, which enables customers to set up their investment plan towards a specific goal.