Clients looking for investment advice at the biggest Nordic bank have recently been introduced to a robot. Nora, the robo-adviser that Nordea Bank AB launched last month, has already been asked to start investment processes equivalent to 4 percent of the roughly 500,000 people who get savings advice from the bank each year. Nordea wants to use Nora to help expand that figure to about 2 million people in the next 2-3 years.
After Nora’s commercial launch in April, 20,000 processes have been started via the service. Of those, more than 3,000 resulted in completed transactions, with invested capital now at 23 million kronor ($2.6 million). Nordea wants Nora to reach 50,000 customers and 300 million kronor in capital this year. The bank had total assets under management of 330 billion euros, or about $390 billion, at the end of last year.
“While we’re aware that we’re building something from scratch and that it will take some time to build capital, Nora is doubling its capital and number of customers every six weeks,” Katja Bergqvist, co-head of the wealth management division in Stockholm, said in an interview.
Nordea has made going digital a seminal project, with Chief Executive Officer Casper von Koskull planning 6,000 job cuts as the bank relies less on humans and more on automation. Nordea has teamed up with Apple Pay for its digital payments offering, saying last year that it attracted record client demand. Most of Nora’s clients are so-called millennials (under 40), though Bergqvist says the robot is also particularly popular with women aged 50 to 60.
Scandinavia’s fintech scene is giving birth to an increasing number of firms encroaching on business that was traditionally performed by the biggest banks. That’s put pressure on the banking establishment to ensure it doesn’t fall behind, with huge sums of money being dedicated to digital strategies in everything from mortgages to investment advice.
“We all study and learn from each other,” Bergqvist said. “I don’t really regard the other players as competition, as there’s so much saving and advising going on and Nordea has a huge customer base.”
In the race to get ahead, some banks are learning that their automated services don’t always fully comply with regulatory standards. Danske Bank A/S, the biggest lender in Denmark, was recently rapped over the knuckles by the regulator there for failing to ensure that its robo-adviser, June, was living up to investor-protection rules. Bergqvist says Nordea has studied the Danske case to learn from it, and plans to introduce Nora in Denmark this quarter. Nordea is already offering its robo-adviser to clients in Sweden and is in the process of rolling out the service in Finland. The bank expects to have Nora up and running in Norway before the summer, Bergqvist said.
Nordea recently reorganised its wealth management business to step up its focus on digital services, a move that saw Bergqvist become co-head of the wealth unit together with Gustaf Unger. As part of that reorganisation, Nordea created a new unit called Digital Wealth.
“We want to push digital development even more,” Bergqvist said. She said that includes “cooperating with fintech companies and starting partnerships.”