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May 24, 2016

UBS and Santander bank on fintech robo-adviser SigFig

News: Banks will collaborate with start-up in addition to providing capital.

By James Nunns

Interest in wealth management technology appears to be high after SigFig raised $40 million in a new financing round.

The San Francisco-based robo-adviser is designed to provide investment advice through a combination of design, data science, and technology.

Santander InnoVentures is one of those that have participated in the round along with UBS, Comerica – which contributed a $7m debt facility, Eaton Vance, New York Life, Bain Capital Ventures, DCM, Nyca Partners, and Union Square Capital Ventures.

SigFig plans to use the capital in order to support a major expansion of its team and platform as it scales its enterprise strategy of building investment technology for a wide range of financial institutions.

UBS, which previewed its investment last week, said that it plans to create a joint adviser technology research and innovation lab. UBS will provide financial advisors, product experts, and technologists to work with SigFig’s digital experts.

Santander has similar motivations to UBS. Mariano Belinky, managing partner, Santander InnoVentures, said: "The ongoing need for affordable, accessible financial advice continues to be an area of focus for the investment industry.

"We hope to be able to now collaborate with the aim of ultimately bringing their platform to serve Santander’s 122 million customers."

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SigFig operates its own Web and mobile apps which pull in users’ data from a number of different sources such as brokerage accounts and 401k’s, which is a retirement savings plan that is sponsored by an employer.

The company has received a lot of interest since it was founded in 2011 having already secured deals with media partners CNN and USA Today in order to power portfolio trackers on their sites.

According to the company the service is now helping millions of people around the world to track and optimise over $400bn in assets.

The decision from both UBS and Santander to not only back SigFig financially but also decide to work with it, is a sign of a growing trend of collaboration between financial services organisations and fintech companies.

According to an Accenture report, there is a growing number of businesses in the financial services market that are seeking to collaborate in order to integrate new technologies into their own operations.

Often FS organisations have chosen to acquire fintech companies and then try and integrate their technologies, however, this has often proved difficult to achieve with any great success.

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