EXCLUSIVE— The newest feature brought to customers by German fintech Raisin is the ability to invest in ETF portfolios via the app, something that more and more fintechs have been relying on machine learning and artificial intelligence to achieve.

Raisin’s portfolios, however, are aimed at “self-directed investors” — i.e., investors who know what they’re doing, not the first-timers so often targeted by companies like Wealthfront and Betterment — so automation is only used for particular areas, Til Rochow, head of investment products for Raisin, told Bank Innovation.

Rochow told Bank Innovation via email that as the ETF solutions are “aimed” at these self-directed investors, “accordingly, customers choose one of the four portfolios. Parts of the investment process are automated — such as the rebalancing and the reinvestment of distributions — but fully rule based.”

Raisin’s ETF portfolios work via a partnership with Vanguard (as well as French bank BNP Paribas, which due to regulatory reasons will conduct trade executions), which does not have a “direct-to-consumer” business in Germany, Rochow said. Raisin, which announced the portfolios yesterday, allows users to choose four portfolios with varying risk tolerance via their Raisin account: the process takes about ten minutes for those who aren’t already registered on the app, Rochow said.

Rochow said of the Vanguard partnership via email:

We also strongly believe in a globally diversified, index-based approach to investing. Hence we have a clear overlap in our investment philosophy. It is a clear and consistent value proposition – from asset management to distribution – and we believe that our customers value this consistency. Our customers also benefit from access to Vanguard index funds, which we include in the portfolios for asset classes like fixed income and global small cap equities. These funds are usually not directly available for German retail investors.

Raisin is keeping its approach to ETF simple, relying on partnership and low cost to drive scale, Rochow said — the company is keeping annual costs for the portfolio solution below 0.5% for customers in order to drive scale, he noted.

Rochow did not name a timeframe for the product’s rollout to additional markets — at the moment, it is only available for customers in Germany — but said, “Given that we have a presence across Europe, we are of course excited to develop an international ambition for this product.”

Started in 2013 and based in Berlin, Raisin now has over 100,000 customers, Rochow said, adding that it has “brokered almost €6 billion in deposits and continue to grow strongly.” Its platform is currently available to users in its native Germany, with the brand WeltSparen, as well as consumers in Spain, France, and the United Kingdom.

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