The Money Code

A new wave of affluent, digitally savvy Indians are willing to invest through financial algos

- Kripa Mahalingam

Twenty-three-year-old Aryan works with one of Bengaluru’s leading technology companies. First time out of his home-town, he is soaking in the big city thrills thanks to his first job. With ride-share and co-living spaces, he isn’t looking to buy a car or a house. That was his dad’s dream. Instead, he wants to retire by 40!

His friend just started investing in mutual funds (MFs) and asked him to check out Scripbox. What he saw caught his interest: The online investment platform starts by telling you what 5,000 can get you — a few days at a resort with friends, an expensive date with someone special and, with a regular monthly investment for 17 years, a multimillionaire networth. The last one had him hooked and he started with the click of a button.

Bengaluru-based Scripbox is a fully automated advisory firm looking to onboard first-time investors, and provide them with advisory services. Scripbox is powered by algorithms that make investment recommendations based on the customer’s income details, risk profile and financial goals. This data is fed into an AI engine, which matches these parameters with investment products and delivers an optimal portfolio in real time. The robo advisor then rolls up its sleeves and begins to manage the portfolio, rebalancing it and ensuring tax-efficient return.

Robo advisory is the buzzword in India’s investment industry today. But like most things tech, the concept took birth in the US more than a decade ago. Back in 2008, after the crash, when investors were thoroughly disgruntled with the conventional ways of investing, with bankers and investment advisors playing foul with customers, a young American entrepreneur, Jonathan Stein launched an independent online advisory start-up called Betterment.