Commercial Bank of Dubai, which counts Investment Corporation of Dubai as its biggest shareholder, rolled out a robo-advisory investment app to tap growing demand for online trading during the Covid-19 pandemic.
The app, CBD Investr, offers customers access to globally diversified portfolios including stocks, bonds and other asset classes using low-cost exchange-traded funds. The portfolios are tailored to customers' goals, risk appetite and investment time horizon and will be actively monitored and optimised depending on changing market conditions, CBD said in a statement on Sunday.
“Digital technology is disrupting the financial industry and is a key strategic priority for CBD as part of its vision to be ‘default digital’,” Bernd van Linder, chief executive of CBD, said.
“We believe the next wave of disruption will be in the investment industry."
Retail investors are increasingly seeking direct access to markets with the help of technology, leading to a surge in popularity for zero-commission trading apps such as Robinhood, eToro, Interactive Brokers and Sarwa. Demand for trading apps jumped during the pandemic due to monetary easing by the US Federal Reserve and other central banks, giving people more money to invest during pandemic lockdowns.
UAE-based low-cost robo-advisory platform Sarwa said in March that it will roll out a zero-commission stock trading service within the next six months to tap demand for online trading.
Banks and brokerages are scrambling to compete in this emerging area of financial investing, according to Robo-advising: Catching up and getting ahead, a report by KPMG that polled 1,500 bank clients.
Although overall customer awareness of available solutions in the robo-investing space remains relatively low, investors have strong interest in their banks providing digital portfolio solutions, the study said.
There will be more than $16 trillion worth of assets under management with the support of robo-advisory services by the year 2025, which is roughly three times the amount of assets managed by BlackRock, the world's biggest asset manager to date, according to The expansion of Robo-Advisory in Wealth Management, a report by Deloitte.
Customers can download the CBD Investr app, register using their Emirates ID, answer questions to assess their risk profile and create a personalised portfolio, the lender said. They do not need a CBD bank account to fund their portfolios and can make a local transfer from any bank account in the UAE.
Customers can start investing with just $500 and withdraw at any time without any charges, the bank added.
“CBD Investr heralds the next generation of investment services and provides financial market access to a much wider range of investors,” Mark Zanelli, general manager, treasury, asset management and global markets at CBD, said.
The app will provide a online portfolio feature, which will allow customers to create portfolios and monitor asset performance before investing money. The app will also introduce a self-investment solution for more experienced investors, CBD said.
ICD, the principal investment arm of the emirate’s government, controls a 20 per cent stake in the bank.
Developed in partnership with InvestSuite, a wealth technology company based in Belgium, the CBD Investr app is powered by smart algorithms that actively manage investment portfolios to deliver optimal risk-adjusted performance, according to the statement.
“Our co-operation is proof of the new, emerging ecosystem consisting of financial institutions, core banking providers, management consultants and FinTechs, with each bringing their unique strength,” Bart Vanhaeren, chief executive and co-founder of InvestSuite, said.