With investment apps and digital investments gaining more popularity, The Fintech Times spoke to Karan Shanmugarajah, the CEO and co-founder of WealthKernel, to understand how they’re providing the building blocks to bring digital investments to financial services companies
WealthKernel is an investment infrastructure provider helping fintechs and financial businesses bring digital investment services to their customers, either as a stand-alone or as an addition to their existing offering. “We often describe what we do as the “plumbing” behind the scenes for wealth management companies,” said Karan. “We handle the regulatory and technical side of things so that fintechs and financial firms can bring their offering to market at speed.”
WealthKernel was founded with the intention of making wealth management and investing services more accessible to everyone. According to Karan, conversations surrounding money, wealth and investing were typically refined to those who either work in the finance industry or had larger sums of money to invest with.
He said: “The fintech ‘revolution’ today has changed this, opening conversations around investing, with people seeking deeper connections with their financial providers to understand how their money can work better for them. And with the need for better financial services, also comes the need for better infrastructure. As such, WealthKernel is providing the trusted building blocks for firms offering better savings, investments, pensions solutions across the UK and Europe.”
WealthKernel’s core offering offering helps fintechs integrate investing functionality via API, while also providing regulatory support, user onboarding, brokerage and trading, and custody services. By building on the WealthKernel platform, they can handle the “difficult regulatory and technical side of things”, so fintechs can focus on more important things – such as growing their business, building great user experiences and brands, and improving their customer service.
“Our infrastructure is optimized for the delivery of investment and wealth-management services to everybody, not just “higher value” and HNW retail investors typically serviced by incumbents. If you think of WealthKernel as the engine under the hood of fintechs, our engine is built for the needs of everyday people with very small sums of money to save and invest,” said Karan.
“We work closely with our clients to understand what their infrastructure needs are, and how we can help them bring their product to market as quickly as possible. For some, this can mean integrating and building upon our full suite of investment APIs. For others, it can just be about providing trusted custodial services. WealthKernel currently custodies millions of pounds for thousands of retail clients in the UK/Europe.”
The rise of investment apps
The investment app market has seen a significant rise in popularity, particularly over the last year or so. The total number of UK users investing via financial apps stands at 3.2 million recorded on Google PlayStore, with an increase of 1.6 million more users in total since March 2020. Though there are likely many reasons for this new demand, Karan believes it’s down to the apps being more accessible to more people.
“Popularity is a function of accessibility. The wealth and investment space typically hasn’t been that accessible for most people. Now, however, we’re seeing the emergence of fintechs, banks and financial offerings – like Monzo, Freetrade, or Nutmeg to name a few – that are speaking to people how they want to be spoken to.
He continued: “As these new fintechs have made financial services more accessible to the masses, so too have intrigue and interest in areas such as digital investing increased dramatically. And we only need to look to the recent GameStop saga to see how significant this growth has been”
When asked about what the future holds for WealthKernel, Karan said: “We see ourselves as an enabler, we exist because we believe that the wealth space and the savings space, really isn’t that accessible for most people. Most people don’t get the right level of financial support and don’t know what good advice looks like. That’s partly why rich people pay people to give them advice.
“For most people, finding Financial Services is boring, they don’t understand it, nor should they. But we’re empowering a world where businesses talk to people the way they want to be spoken to. There is an emergence of all types of companies that challenge the way people consume financial services. They’ll build better UX, and find a speed to market that works for them, and will offer much more variety and choice.”
Karan further added that this is a particular trend in the fintech market, with consumer expectations drastically changing and the younger generations thinking about money more and are less willing to put up with poorly designed products as some of their predecessors.
“This is where financial services is going at the moment, and I expect there will be an increasing number of fintechs innovating in this space,” Karan concluded.
“While we don’t know what these companies will be, or what problems they will solve, there will always be demand for trusted infrastructure to build on – and this is where WealthKernel fits into this trend.”