Scalable Capital launches in Germany and UK
To explain their business model very briefly: Scalable Capital wants to give everybody the opportunity to profit from private investment management. They use top-notch technology and market evidence to offer the customers an ETF portfolio at a fixed risk rate, which is done by dynamically adjusting the weights of each asset class within the portfolio.
This is what distinguishes them from already existing services that might offer functional websites and fast onboarding processes, but lack the real innovation in the investment methodology which Scalable Capital has put a lot of effort into to make it as efficient and secure as possible. A long-term and flexible investment strategy allows them to effectively adjust the portfolios to developments in the market. “Especially less experienced investors often make emotionally-driven investment decisions. This manifests in them buying close to the peak and then selling at the bottom of the market when facing a possible loss.”, says Dr. Manuela Rabener. Without a doubt, there have been numerous people who made impulsive exits and then re-entered after the market had already recovered.
Scalable Capital claims to be as transparent as possible. Next to being completely independent, thus being able to offer their customers a big variety of ETFs worldwide, the investors can always track the current weights of their portfolios and many more crucial information online and in the app. The services is already available in Germany, where Scalable Capital has already secured the BaFin license as the first independent fintech company and the first customers have been onboarded in the last two weeks. The UK is to be following next month when the FCA license will have been obtained. The aim is to expand Europe-wide after successfully launching in the two biggest markets in Europe.
Death by a thousand small punches
Apart from presenting their business model, we talked to the Scalable Capital team about the general developments in the financial sector and especially the future of the banks. Adam French says he doesn’t see the innovation coming from the banks, having worked in a bank for several years himself: “Banks are currently still making enough money the way they did before and often don’t see a reason to change much.” According to him, banks now see only few of many verticals being disrupted, while at some point there will be many companies disrupting at a greater number of verticals. There might be a threat of “death by a thousand small punches” for some of the banks that don’t take the risk seriously. The whole team stated to be excited about operating in this field at the moment, which Dr. Manuela Rabener concludes: “Everyday there’s something new and it really is just the start of something big.” We absolutely agree with this statement and are awaiting the upcoming punches the banks will have to take.