Rise of the robo-ad­viser in main­land fi­nance

Pro­vid­ing au­to­mated ad­vice and trad­ing pro­grams, pop­u­lar phone apps uti­lize big data

China Daily (USA) - - CHINA - By FAN­FEIFEI fan­feifei@chi­nadaily.com.cn

So-called robo-ad­vis­ers — au­to­mated ad­vice and trad­ing pro­grams, that can be ac­cessed via a smart­phone — are rapidly be­com­ing a big busi­ness in China.

Robo-ad­vis­ers, phone apps that pre-se­lect a range of as­sets and trades for cus­tomers au­to­mat­i­cally, have be­come in­creas­ingly at­trac­tive as in­vestors search for af­ford­able ac­cess to ad­vice that im­proves re­turns dur­ing a pe­riod of low in­ter­est rates, weak lo­cal share mar­kets and grow­ing pres­sure on real es­tate prices.

They pro­vide cus­tom­ized in­vest­ment ad­vice to in­di­vid­ual in­vestors based on big data and ar­ti­fi­cial in­tel­li­gence, and their mo­men­tum of growth has picked up in China as a batch of in­ter­net com­pa­nies and tra­di­tional fi­nan­cial in­sti­tu­tions are tap­ping into the emerg­ing field.

PINTEC, a Chi­nese in­tel­li­gent fi­nan­cial ser­vices tech­nol­ogy com­pany, launched its in­tel­li­gent in­vest­ment ad­vi­sory plat­form Xuanji in Au­gust. The robo-ad­viser of­fers in­tel­li­gent in­vest­ment man­age­ment and as­set al­lo­ca­tion so­lu­tions to in­vestors.

Xuanji is the first ren­minbi de­nom­i­nated robo-ad­viser in China, ac­cord­ing to PINTEC. Its team com­prises a group of ex­pe­ri­enced as­set man­agers, data sci­en­tists, and tech­nol­ogy devel­op­ers and pro­vides in­tel­li­gent, cus­tom­ized and au­to­mated wealth man­age­ment so­lu­tions for China’s bur­geon­ing mid­dle class.

“The robo-ad­viser has be­come a trend of wealth man­age­ment in for­eign coun­tries, but in China the dig­i­tal as­set al­lo­ca­tion sys­tem is far less com­mon and is based on US dol­lars, which makes for a high thresh­old for or­di­nary Wei­Wei, peo­ple,” said Zheng CEO of Xuanji.

Xuanji’s dig­i­tal as­set al­lo­ca­tion sys­tem com­bines quan­ti­ta­tive mod­el­ing, ma­chine learn­ing with pro­grammed trad­ing, to cal­cu­late and de­liver in­vest­ment port­fo­lios to suit clients’ de­mand and pref­er­ences, as well as make mod­i­fi­ca­tions when users’ con­di­tions and mar­ket en­vi­ron­ments change. Yudong,

The com­pany also launched an in­ter­na­tional ver­sion re­lated to dig­i­tal as­set al­lo­ca­tion based on theUS dol­lar, aim­ing at clients who have an in­vest­ment de­mand for dol­lars

Robo-in­vest­ment arose in the United States in 2010 and wit­nessed an ex­plo­sive growth in 2015. Star­tups such as Wealth­front and Bet­ter­ment have de­vel­oped very fast and achieved high val­u­a­tions, carv­ing out a ma­jor mar­ket share for them­selves.

With the rapid devel­op­ment of ar­ti­fi­cial in­tel­li­gence and big data in China, roboin­vest­ment ad­vi­sors be­gan to emerge in the main­land last year. Pro­po­nents say there is a huge de­mand for di­ver­si­fied in­vest­ment so­lu­tions, that lever­age tech­nol­ogy to en­hance fi­nan­cial ser­vices, with the rise of the Chi­nese mid­dle class.

Founded in 2012, PINTEC uses big data and dig­i­tal tech­nolo­gies to pro­vide fi­nan­cial so­lu­tions for con­sumers and small busi­nesses. The com­pany said it has cre­ated fi­nan­cial ser­vices so­lu­tions for the dig­i­tal econ­omy.

“We will fo­cus on the in­tel­li­gent fi­nance sec­tor and make great ef­forts in tech­no­log­i­cal in­no­va­tion and ac­cu­mu­la­tion, and co­op­er­a­tion with or­ga­ni­za­tions,” said Wei Wei, CEO of PINTEC.

“We be­lieve in­tel­li­gence will be the fu­ture di­rec­tion in the fi­nance in­dus­try and we are march­ing in the right di­rec­tion,” he added.

PINTEC owns Du­miao, a dig­i­tal con­sumer lend­ing tech­nol­ogy of­fer­ing Xuanji, Hong­dian Fund, and Muf­fin In­sur­ance, an on­line in­sur­ance com­pany.

Tong Ying­man, an ex­pert at wang­daizhi­jia.com, a web por­tal that tracks the in­ter­net fi­nance in­dus­try, said there were cur­rently no spe­cial laws and reg­u­la­tions to reg­u­late robo-ad­vis­ers.

“These fini­cal ad­vi­sory plat­forms need to ac­quire re­lated qual­i­fi­ca­tions to of­fer in­vest­ment so­lu­tions in ac­cor­dance with the types of fi­nan­cial prod­ucts,” Tong said.

In­tel­li­gence will be the fu­ture di­rec­tion in the fi­nance in­dus­try and we are march­ing in the right di­rec­tion.” CEO of PINTEC

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