SoFi deepens AI

Financial services firm SoFi said on Tuesday it has bought Composer, an AI startup that helps retail investors build and execute sophisticated trading strategies that have long been the preserve of Wall Street firms.

While commission-free trading has made it easier for individual investors to buy and sell stocks, access to sophisticated systematic investing tools has remained largely concentrated among hedge funds and institutional firms even in recent years.

SoFi is betting that AI can help close that gap by allowing mom-and-pop investors to build and test complex trading strategies with little to no coding or specialized AI prompting expertise.

“If you can explain an investment idea in plain English, you can now build, test, and automate it,” CEO Anthony Noto told Reuters.

“AI is already a foundational part of investing, and much like how mobile became a foundational part of banking, it will completely transform the industry.”

SoFi said that following its acquisition of Composer, customers will also be able to access thousands of community-created strategies and automate execution from a single platform. It did not disclose the terms of the deal.

The San Francisco-based fintech in April reported a 35 per cent jump in members to a record 14.7 million in the first quarter. Its adjusted revenue surged 41 per cent to a record US$1.1 billion over the same period.

Competition to provide services to retail investors has intensified following the pandemic-era trading boom that brought millions of new customers into financial markets.

With commission-free trading now ubiquitous and product offerings increasingly similar, brokerages are locked in a fierce battle to stand out in a crowded market.

Last month, brokerage Robinhood said it would allow customers to create dedicated trading accounts and deploy AI agents to trade stocks on their behalf through its platform.

Referring to how its customers are responding to recent stock market turbulence, Noto said that “Members are staying engaged through volatility and looking for opportunities rather than retreating from the market.”

(Reporting by Manya Saini in Bengaluru; Editing by Ronojoy Mazumdar)