Tue, Dec 12, 2017 - Page 10 News List

June, a wealth management robot, assists 11,500 clients

Bloomberg

In a bit more than half a year, Danske Bank A/S has attracted 11,500 clients to an investment service provided by a robot. Denmark’s biggest financial firm now hopes the project will help it expand its wealth management operations.

The robot is called “June.” It targets retail clients and small businesses that normally would not have the resources to work out what to do with their surplus cash.

Because Denmark holds the world record in negative rates — the nation has been below zero since 2012, longer than any other place on Earth — the bank says that it makes sense to redirect deposits now earning nothing.

Customers encountering June for the first time are asked how much they want to invest — the limit is 1 million kroner (US$158,370) per person.

They then need to choose a risk category. If they are not sure, Danske provides a short test. That is followed by questions on a preferred investing time horizon, as well as income, spending, assets and liabilities.

Then June provides a recommendation on which of five funds to invest in, based on an algorithm. The whole process takes about 10 minutes.

“The idea with June is basically to help democratize investment,” Jakob Beck Thomsen, Danske’s product chief for June in Copenhagen, said in a telephone interview.

“More than half the people using June are below 40,” Thomsen said. “Normally, with our more conventional investing services, the average age is above 60.”

Clients are offered access to exchange-traded funds, with varying distributions of stocks and bonds, and different geographic spreads, depending on their risk appetite.

A lot of clients are now joining Danske via June, Thomsen said, adding that the robot “is not a job killer.”

“We’re basically looking to expand our wealth business and this is a complement to our existing business,” Thomsen added.

However, the kind of automation that June offers is set to spread throughout Danske.

Thomsen said that “in terms of the technology, a lot of the things you see in June, you’ll start seeing across other areas of the bank as well.”

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