WealthKernel, a provider of digital investment services and infrastructure, has introduced Instant Matching Deposits that are being powered by ClearBank, the Cloud-enabled clearing bank.
Instant Matching Deposits enables investors “to instantly fund their accounts and begin trading without waiting days for payments to clear, and benefit from additional consumer protections and improved reliability.”
ClearBank is supporting the service by offering access to the Faster Payments Service scheme “to speed transactions and Client Money Accounts to allow WealthKernel’s clients to automate reconciliations.”
Retail investing has significantly increased to the point where retail trading now “accounts for almost as much volume as mutual funds and hedge funds combined.” This has in part been “driven by higher disposable incomes available to many due to Covid-19 lockdowns and a persistently low-interest-rate environment.”
The update further noted that it’s also being “driven by the simple and low-cost access to new digital-first trading and wealth management offerings, provided either by dedicated apps or banks, fintechs or other institutions who have integrated this functionality into their offering.” In this crowded market, trading and wealth management providers are aiming “to rapidly embed new services and capabilities that allow them to create specialist services for specific, and often underserved demographics, as well as differentiate their offering from competitors.”
Instant Matching Deposits will enable the clients of WealthKernel’s trading and wealth management providers “to instantly fund and trade without waiting for payments to clear.” This is quite compelling for new or more risk-averse clients who can be “concerned about the status of funds while they are settling.”
By eliminating manual processes via the automated reconciliation and allocation of investments to the appropriate account, the service significantly enhances scalability and reduces the number of potential errors, “in addition to accelerating retail customers’ investment journeys.”
ClearBank is also offering WealthKernel with Client Money Accounts which WealthKernel will use “to hold the funds on behalf of its customers in accordance with its obligation to protect their money under CASS 7.”
In addition, ClearBank will offer WealthKernel “with connection to the real-time Faster Payments Service scheme, via APIs.”
Karan Shanmugarajah, CEO of WealthKernel said:
“WealthKernel prides itself on working with diverse businesses that are disrupting the investment sector and creating positive change, be it through the likes of ESG-focused investment programmes or by supporting demographics who are often underserved by existing products. To give these innovative companies the best chance to succeed, they need a better trading tech stack that is easy to embed and scale. By partnering with ClearBank and utilising its embedded banking infrastructure, we’re addressing this need and are confident that the solution will open up the market for our clients and ensure a better experience for their end-users.”
Charles McManus, CEO of ClearBank remarked:
“ClearBank is proud to work with fintechs like WealthKernel that want to challenge the status quo by pioneering new services and capabilities that help providers to both innovate and differentiate as well as create better and more inclusive services.”
McManus added:
“WealthKernel’s new Instant Matching Deposits product demonstrates how our embedded banking technology can help financial service providers to create pioneering services that meet the demands of new customer segments as well as improve operational efficiencies and provide elasticity. With this new service launch and the recent funding raise, WealthKernel is perfectly positioned to push the industry forward and we’re excited to be part of that journey.”
In December of last year, WealthKernel acquired a $7 million investment in an extension of its Series A round, which was led by XTX Ventures and ETFS Capital. The company says it is using the funds “to support integration of intraday trading, and the expansion of its services into European markets.”