DBS bank launches “robo-investor” to appeal to investors looking for low maintenance investments

Singapore’s largest bank DBS unveiled a “robo-investor” service on Thursday to allow customers to manage their investment portfolio through a “robot” which automates investment processes such as rebalancing, executing trades and monitors investment performances.

Called digiPortfolio, the service was made live to the bank’s Wealth customers earlier this week and is scheduled to be rolled out to all of DBS’ customers by the end of this year. The bank has 5.2 million retail customers, of which three million make their banking transactions online.

The service automates investment processes and creates an investment portfolio based on the client’s risk appetite, varying the proportion of equity, fixed income, and cash invested into unit trusts chosen by the bank’s investment team.

Lack of time, lack of information puts people off from investing

According to Mr Lim Soon Chong, regional head of investment products and advisory at DBS consumer banking group and wealth management, only one in 10 Singaporeans have made investment transactions in the past 12 months.

Mr Lim attributed the low investment activity among Singaporeans to the lack of time, high upfront fees, and the inertia faced when filling up forms which can be tedious. The many choices to make on deciding on an investment product also puts off Singaporeans.

DBS claims its service is different from other robo-advisers in the market, as its investment strategy is not fully passive and completely automated.

The platform is targeting “first-time investors”, and due to the high level of automation in the platform, the cost of managing an investment portfolio is lowered, said Mr Lim. The platform offers two options - The Global Portfolio which requires a basic investment sum of S$1,000 and the Global Portfolio Plus which requires 10 times more in costs to begin.

The management fee for the Global Portfolio plan is 0.75% of the portfolio value annually while the Global Portfolio Plus’ fees are tiered at 0.75 - 0.85%, based on the value of the portfolio.

Banks rolling out new initiatives to attract client investments

Other banks in Singapore have also rolled out similar investment-related initiatives to attract more clients to invest their money with them.

Last October, UOB asset management upgraded its digital advisory service so that its corporate clients can invest in a customized portfolio.

Last August, OCBC launched a robo-investment service using technology developed by fintech startup WeInvest. Investors who wish to join the platform must make an initial investment of S$3,500, and a 1.5% annual fee will be charged for assets under management of up to S$50,000.

Separately, UOB launched its first high street wealth banking branch in Singapore last month to support emerging affluent individuals in growing their wealth through investing.