Automated investing
AI Fintech Ecosystems Trending Wealthtech World-Region-Country

How Automated Software Is Benefitting Investing With Gridline, Cap8, Nucoro and More

No man is an island when it comes to fintech, and in the pursuit of a better world driven by better financial services, it’s clear that standing together means progressing together. This September at The Fintech Times, we’ll be delving into every corner of what it means to be a fintech ecosystem. We’ve dedicated the entire month to investigating what makes a successful fintech ecosystem, how fintechs can work together more effectively, as well as providing a regional view of some of the industry’s best examples of community collaboration.

Having begun our second week of coverage into fintech ecosystems with a look at how artificial intelligence (AI) is being applied to wealth management, here in our second instalment of the week, we’re tapping into the subject again, but this time with a much broader scope.

An act once reserved exclusively for the rich and wealthy, investing is no longer limited by monetary restrictions and user barriers, and the market as a whole has opened out just as much as its technologies have developed.

Here, we’ve invited a wide array of investing experts to share how the use of automated software is pushing the investment industry into a new sense of purpose; an industry that’s quickly becoming accessible for all.

Lower costs and lower barriers
Matt Cockayne, CRO at Nucoro
Matt Cockayne, CRO, Nucoro

Opening our discussion, Matt Cockayne, CRO at the investment and savings platform Nucoro, explains how automated software is far-outpacing the abilities of traditional investing systems; especially in regard to the associated cost of use.

“Despite their substantial price tags, legacy wealth management solutions lack the speed and versatility of modern, automated variants, meaning those wealth managers still using them pay more to do less,” he says.

“Meanwhile, the lower costs for end users and firms, coupled with the UX-driven tools that automated software supports, are toppling barriers to entry for a whole new segment of investors.”

For Cockayne, it is perhaps this last point that represents the greatest benefit of automated software to the future of investing.

“As this new segment of investors grows in confidence with the entry-level tools and services at their disposal,” he continues, “they soon begin to explore more sophisticated investment offerings. Offerings they otherwise would not have known about, much less have used.”

Cockayne underlines the present reticence towards the adoption of automated software from wealth managers who, according to him, consider the assets under management (AUM) of investors using these services to not be significant enough.

“As the software becomes more pervasive across the investing landscape, this reticence will start to wane,” reassures Cockayne.

“Ultimately, the initial services that automated software underpins act as a gateway for more complex, value-adding variants once an investor has developed their knowledge-base and accumulated additional wealth.

“Aside from presiding over an AUM that increases organically, by nurturing these new investors through automated services, wealth managers can develop stronger bonds of customer loyalty. Where these investors are younger, those bonds can become lifetime relationships.”

Time to automate
Frederik Bussler, a consultant at the alternative investments wealthtech platform Gridline
Frederik Bussler, consultant, Gridline

Frederik Bussler, a consultant at the alternative investments wealthtech platform Gridline, acknowledges how registered investment advisors (RIAs) are spreading themselves too thinly, trying to serve more clients in less time.

As the industry is forecast to experience significant growth in the coming years, Bussler emphasises how RIAs are expected to turn to the power of automation to help meet this demand and scale their businesses.

He points to the recent study of Deloitte as an example of this. The data states that wealth and asset management solutions that embrace digital transformation, including automation, can increase their productivity by 13.8 per cent, AUM by 8.1 per cent and revenue by 7.7 per cent.

“Automated software can help with a variety of tasks, from portfolio construction and risk management to client onboarding and reporting,” comments Bussler. “This frees up time for RIAs to focus on high-value activities like strategic planning and business development.

“In addition, automated software can help RIAs to improve the quality of their service. By reducing errors and increasing efficiencies, automation can help firms to provide a better experience for their clients.”

Portfolio diversity
Santiago Guzman, co-founder of Cap8
Santiago Guzman, co-founder, Cap8

In regards to the impact that automated software has had on investing, Santiago Guzman, co-founder of Cap8, a Boston-based capital management and investment firm leveraging the power of technology and smart data, shared: “Technology has changed the landscape for investing at multiple levels. Some of the benefits are the amount of information we can process, the speed at which we can react to events and the way we can replicate investment ideas in a systematised manner.”

Developing on his latter point, Guzman explains how through the use of automated software, some investors have achieved a more efficient path toward their investment goals.

“For smaller portfolios and less financially savvy investors, automated solutions are an inexpensive way to position a portfolio to an exposure that is in line with their needs and appetite for risk,” he comments.

“This is especially relevant in an era where the market is flooded with products to choose from and that are available to trade (i.e., ETFs).”

Guzman points to automated software as a mechanism for discriminating and targetting the mix of assets a portfolio should have as a function of specific parameters, such as regional exposure, volatility and specific tax implications.

“Like any other methodology for decision-making, there are benefits and challenges. Automated software provides a good solution considering needs that are considered basic in today’s market, and that is usually only circumscribed to the profile of the investor, the characteristics of assets, and maybe some statistical analysis to consider historical information on price movement,” he comments.

Guzman goes on to discuss how advanced software is being continuously developed as an aid to formulate investment ideas and execute more complex strategies.

“These are usually built within institutional investors, and the use can range from simulations to automated execution, for example, systematic investing,” he comments.

“Many funds are evolving towards a mix of automated software with a limited range of human intervention. Also, the availability of new technologies, such as predictive models, AI and data availability, is helping to take the frontier of opportunities in this realm to a level never thought of before.”

Wealth management for the many
Adam Hallquist, principal at the growth equity investment firm FTV Capital
Adam Hallquist, principal, FTV Capital

According to Adam Hallquist, principal at the growth equity investment firm FTV Capital, the advancement of software within wealth management has led to the democratisation of investment advice, consumer empowerment and lower costs, having modernised the experience for clients and financial advisors.

“At FTV, we see exciting growth opportunities in back-office digitisation and workflow automation for the wealth management industry, which currently relies heavily on inefficient, manual, paper-based workflows,” comments Hallquist.

He cites its portfolio company Docupace, which offers a cloud-based, integrated software platform to connect clients, advisors and operations, as an example of this, adding that “by automating back-office operations, advisors can reduce expenses and improve efficiency.”

Hallquist emphasises how customers and enterprises are being drawn towards new front office technologies that are able to deliver a digital user experience and a customisable way to manage assets.

“For example,” he continues, “robo-advisors allow wealth managers to reach and serve a more diverse client base, along with providing general financial advice to younger clients.

“In the past, wealth management services were typically only available to high net-worth individuals. However, robo-advisors offer lower fees than traditional financial advisors, allowing those with lower incomes to have access to wealth management platforms.

“As these changes continue to take place, we’re entering a new era of wealth-tech innovation, geared toward making investing easier, more transparent and more automated.”

A more competitive market
Chris Doner, CEO of the US-based software development company Access Softek
Chris Doner, CEO, Access Softek

As the traditional banking industry continues to experience intense competition from non-traditional financial companies, Chris Doner, CEO of the US-based software development company Access Softek, sees automated investing as a key battleground for credit unions and community banks to stave off competition from fintechs.

“Automated investing tools have been a backdoor entry point for fintechs to acquire customers and start offering more traditional banking services that compete directly with credit unions and banks,” he says.

Speaking on the benefits that investors are enjoying by adopting automated investing software, Doner explains how sophisticated algorithms and AI are able to construct a portfolio optimised for a consumer’s specific characteristics, including age, investment horizon, risk tolerance and investment objective.

Expanding on this, Doner underlines how replacing a human investment manager with relevant software has significant cost benefits which can be passed on to the consumer.

“As a result, consumers can start investing with smaller amounts and incur lower fees. Moreover, the process of automated investing is accessible to individuals with little previous knowledge, eliminating a barrier to taking the first step towards building wealth through the stock market.

“Plenty of studies have shown that automated investing matches or exceeds the returns of actively managed accounts. Hence, new consumers do not sacrifice the quality of the investments being made.”

Doner points to the “tremendous opportunity” for financial institutions to make investing easier and more accessible to users. “As the needs of consumers continue to evolve, banks and credit unions need to support those interested in investing, regardless of budget, personal financial goals, or experience level,” he adds.

“A sophisticated and integrated automated investment platform empowers financial institutions to tap into the $94trillion market that is traditionally dominated by investment firms and large banks. Ultimately, automated software benefits investing by making investing more accessible to millions of potential investors who do not invest today.”


  • Tyler is a fintech journalist with specific interests in online banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

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