investor daily logo

Banks to outsource robo-advice build: Decimal

By Tim Stewart
3 minute read

With the official launch of its end-to-end robo-advice platform, Decimal is betting Australian institutions won't develop their automated advice technology in-house.

Decimal has launched two versions of its robo-advice platform for the institutional market: the 'ready to go' Eqilize and the fully customisable solution Tentalon.

While Eqilize is targeted at institutions that do not have a large IT division (such as many super funds), Tentalon is aimed at the 'tier one' banks that want to carefully customise Decimal's platform for their users.

InvestorDaily sat down with Decimal chief executive Nic Pollock and founder Jan Kolbusz to discuss the ASX-listed software firm's business strategy.

Mr Pollock, who recently laid out Decimal's "pivot" to the institutional market, described the automation of advice in Australia as an "inevitability" that the financial services sector is "only just waking up to".

"From the very beginning, [Decimal's] platform was built to address the 80 per cent of people who don’t seek advice in the first instance," he said.

In that sense, Decimal is a business-to-business company – as opposed to the plethora of robo-advice start-up companies that are directly targeting consumers, Mr Pollock said.

"There’s always going to be a place for those [business-to-consumer robo-advice] brands. But there will probably be a lot less of them than there are today – there will be consolidation," he said.

"Once the big banks and institutions start delivering this, people will return. They’ll go back. You stick with your CommSec, your trusted brands."

Mr Kolbusz described Decimal's robo-advice platform as the infrastructure that will underpin the big institutions' robo-advice offerings.

"Eqilize is a business solution that we sell to the part of the business that [owns robo-advice]. And then we will work with their IT department to connect it to their existing systems," he said.

"In the case of Tentalon, the business has already made a decision to make a major investment in this area. Their IT department has taken responsibility for developing it, and we will help them deliver to the specifications that the organisation is pursuing," Mr Kolbusz said.

Financial institutions are already restructuring their businesses to prepare for the digital delivery of advice, he said.

"You’re seeing these businesses appointing [a] head of digital. Clearly what they’ve recognised is that there’s a lot of stuff here, let’s put someone in charge of it."

Read more:

ING Direct super hits $1.6bn in FUM

State Street to acquire GE Asset Management 

Aussie small-caps emerge as ‘surprise performers’

EY appoints fintech leader for Asia-Pacific 

HUB24 platform adds Bond Adviser