Fideuram Direct and ABN AMRO/BUX show why the future of European investing may combine digital simplicity with the depth of traditional banking.
Ever since FundForum, where digital distribution dominated much of the conversation, ETF Express has focused on why digital platforms have been such powerful distribution channels for European ETFs. In recent pieces, we considered the significance of Mintos adding ETFs and why wealth and investing can’t be overlooked as Revolut takes on the global banking establishment.
But this doesn’t mean neobanks and neobrokers are set to replace traditional channels.
The reality is considerably messier—it’s a blend of what each style of consumer finance does best.
“You need to preserve the customer-centric mindset and speed of execution that make a neobroker attractive, while leveraging the stability and depth that customers expect from a bank,” says Yorick Naeff, Head of Innovation at ABN AMRO, which acquired BUX, the neobroker he cofounded. “The biggest lesson is that these strengths are complementary rather than contradictory.”
Generally, fintechs tend to create more intuitive user experiences and have internal structures that aren’t bogged down by years of antiquated systems and ways of thinking. As Felipe Peñacoba Martinez, CEO of Getnet (a Santander company) and former CIO at Revolut Bank (EU), told me in a recent conversation, “decades of history, legacy systems and mindsets” can make it difficult to replicate the technological nimbleness and culture of fintechs. At the same time, that history often translates to consumer relationships that thrive on other key factors such as trust, regulatory expertise and the ability to better serve pivotal points in a client’s life such as homebuying or retirement.
We’re past the either/or proposition of fintechs versus traditional banks and brokers. Our actual crossroads is far more interesting: how much of the other model each side can absorb without destroying what made it successful in the first place?
One of the better examples of an organisation successfully combining both models is Fideuram Direct, a digital wealth management and online banking platform created by Italy’s Fideuram – Intesa Sanpaolo Private Banking.
A Fideuram Direct customer can begin independently with an ETF savings plan, move into managed investments and eventually work remotely with a human adviser without leaving the same environment.
Andrea Favero, Head of Fideuram Direct, says clients show a tendency to begin autonomously with simple products such as cash deposits and ETF savings plans, then increasingly appreciate “the possibility to build a long-term relationship with a financial adviser.”
Put another way, self-directed investing through digital platforms doesn’t mean the end of one-on-one advice. In some cases, it might be the gateway to an advisory relationship.
ABN AMRO arrived at roughly the same destination from the opposite direction.
“Customers do not choose a neobroker because they want a smaller version of a traditional bank,” Naeff says.
BUX remains a distinct proposition—officially “BUX, by ABN AMRO”—while selectively adding traditional banking capabilities. It will soon launch a savings product developed with ABN AMRO, expanding beyond its existing interest-on-cash offering without turning the platform itself into a bank.
Fideuram, then, is bringing neobroker-style functionality into a traditional wealth platform. ABN AMRO is putting the depth of a traditional bank behind a neobroker. Naeff thinks the distinction will matter less over time: “Customers care about outcomes, convenience, trust and value, and less about organisational labels.”
