Covering the gap between big banks and private banks – RIDE Capital interview
What is RIDE Capital for those who don’t know it yet?
RIDE is a digital private bank offering services such as tax structuring, tax advice, a free business bank account and investments in alternative assets.
My co-founder Felix Schulte and I came up with the idea for RIDE while working on real estate projects in Berlin. Our friends, acquaintances and business partners wanted to participate and had a bit more capital to invest. Along the way, we realized that many private investors are unfamiliar with holding structures, which could help structure their stocks and save on taxes.
While the creation of holding structures is a common procedure in the private management industry and in the startup economy, the concept is not familiar to private investors. We believe that such concepts should be accessible to many more people, which is why we founded RIDE Capital.
How do your products and services differ from traditional financial services?
We make services that were previously reserved for high net worth individuals accessible to less wealthy, but still affluent clients. Our platform digitizes and streamlines services that previously cost high hourly rates.
Traditional private banks generally only accept clients with assets of at least $2 million due to high margin pressures. Meanwhile, RIDE is fully digital and accepts customers with a smaller amount of assets. This makes RIDE a considerably more accessible platform. We see ourselves not only as a financial services provider, but also as a financial education provider that offers training and advice through our web app, YouTube and Instagram.
Many see the big banks as competitors or as something the new digital bank aims to replace. What is your position on this?
Part of the traditional banking world will surely be replaced by fintechs. However, there are many things that traditional banks do better – risk management, compliance and regulation, for example. The way forward for both is to cooperate. Fintechs can benefit from the expertise of traditional institutions, which in turn can not only survive but discover new customers by cooperating with new players. At RIDE, we can create added value as an infrastructure provider with our title accounting service. This service is advantageous for tax consultants who wish to automate their manual accounting or banks who wish to offer additional services.
Could you describe the average RIDE Capital user?
The average RIDE customer has investable assets of 500,000 to 3 million euros. A typical portfolio contains a portfolio of stocks, real estate, crypto, and alternatives such as LP holdings or token assets.
The biggest challenge our clients face is that they don’t know where to turn when looking for quality advice, for example on portfolio allocation. The big banks only offer consumer solutions, which is not suitable for our customers. However, tailor-made solutions like in private banking are either too complex and/or too expensive. The typical RIDE customer is in this gap between street banks and private banks.
What advice would you give to people who have the capital but not the “boost” to enter this investment/wealth management space?
Talk to us! We offer free consultations to anyone interested in our services. Additionally, we provide a lot of content on our social media channels, mainly YouTube and Instagram. We try to reduce the complexity of taxes and investments and make specialist knowledge accessible in a fun way.
Christine, you mentioned that you have a computer background. How does your professional career relate to the birth of digital banking?
I have a background in computer science and business administration. Whenever I’m annoyed by the price, speed or complexity of a service or process, I always ask myself ‘How can this be simplified?’
For example, taxation in Germany is painful, as are most government services. I myself have paid a fortune for tax advisers. My motivation for RIDE was above all to solve my own problems and the things that annoyed me. Our self-service app solves many of the problems I encountered when I first started investing, and given my experience, I see many opportunities where technology can help me.
An example is our securities accounting service. It automates the transaction booking process, which is otherwise done manually by tax advisors at a high hourly rate.
A potential business application for tokenization is the tokenization of real assets. What is it and do you plan to offer this type of service soon?
Tokenization means transferring and dividing the ownership of a tangible asset into tokens. These assets can be anything of value like real estate, art, fine wine, or luxury goods. A token is a digital contract. The most widely used blockchain for these tokens is the Ethereum blockchain.
At RIDE, we are expanding our range of services and offering a wider variety of alternative assets is definitely part of the plan. Since my co-founder and I managed real estate projects together, I have a particular interest in the tokenization of real estate. The market here is also democratizing, and our approach to democratizing financial services runs through everything we offer and develop at RIDE.
About Christine Kiefer
Christine Kiefer is one of two co-founders and managing directors of RIDE, the first fintech start-up to focus on real returns after taxes and costs. RIDE helps investors structure and manage their assets professionally. Christine has participated in the creation of several fintechs, including Billpay and Pair Finance. In addition to her entrepreneurial activities, Christine founded Fintech Ladies, a network of women involved in digitalization and innovation in finance. Christine was a member of the Fintech Council of the Federal Ministry of Finance and previously worked at Goldman Sachs in London. In January 2022, Christine joined the Angel Invest fund as a partner.