By Jenny Surane
(Bloomberg) --Citizens Financial Group Inc., the regional lender spun off from Royal Bank of Scotland Group Plc, will offer a robo-advisory platform next year as the firm builds out its wealth-management business.
Citizens’ digital-investing service will be available online and by mobile phone through a partnership with robo-adviser SigFig, the Providence, Rhode Island-based lender said Thursday in a statement. It allows Citizens to offer wealth-management services to customers at various stages of saving for retirement, said John Bahnken, the bank’s president of wealth management.
“These platforms also can be lower cost for clients that are comfortable doing some of the work themselves,” Bahnken said in a telephone interview. “I expect to continue to invest in things like digital, as well as advisory teams and subject-matter experts.”
Regional banks have sought to improve technology and expand fee-rich businesses such as wealth management as historically low interest rates have squeezed lending margins. Citizens increased the number of its financial consultants by 14 percent this year to 350 from 2015, the bank said in an October presentation, with a focus on hiring in Boston and Philadelphia.
“There’s great opportunities to partner with fintech, and they’re also coming around from the view that initially was, ‘We’re going to eat the banks’ lunch because they’re big, dumb and slow,”’ Citizens Chief Executive Officer Bruce Van Saun said Tuesday at a conference in New York. “As they’ve gone along, they’ve understood that banks have a lot to offer.”
Robo-advisers typically use algorithms to offer investment advice online with little or no human contact. Customers provide their age, income, risk tolerance and goals online through a smartphone, tablet or computer. The industry in the U.S. has grown from almost nothing in 2012 to a projected $500 billion in assets under management at the end of 2017, according to a June report from A.T. Kearney.
To contact the reporter on this story: Jenny Surane in New York at [email protected] To contact the editors responsible for this story: Peter Eichenbaum at [email protected] Steven Crabill, Dan Reichl