Founded in April 2018 and headquartered in Zug, SEBA Bank is a pioneer in the financial industry, building a progressive technological bridge between the digital and traditional asset worlds. In August 2019, SEBA Bank received a Swiss banking and securities dealer license – the first time a reputed, regulatory authority such as FINMA has granted a license to a financial services provider with the focus on digital assets. The wide and vertically integrated spectrum of services, as well as the high-security standards, make SEBA’s business approach unique. SEBA Bank enables clients to invest, safely keep, trade, and borrow against traditional and digital assets, as well as issue tokens in the future, in one place.
Thought leader
Stefan has 25 years of relevant experience in executive and senior roles in wealth, asset management and trading. Before joining SEBA Bank as Head Investment Solutions, Stefan ran the global Investment & Products division for VP Bank Group. Before that he led the Investment Services Europe department for LGT Bank and the global Active Advisory for EFG Bank. Stefan started his career as an option market maker at UBS and structured product trader at Credit Suisse. He is an expert in building global cross-asset product shelves and has hands-on experience in the Fintech space. Stefan holds a Master degree in Business Administration, Management and Innovation.
Q&A with Stefan Schwitter
How is DLT and Blockchain reshaping wealth and asset management? Where is the industry today and how do you foresee things changing in the future?
Wealth management is ripe for disruption and blockchain applications will bring about much needed change. We expect five main areas to be affected and transformed:
- Client onboarding process
- Transactions
- Investment processes
- Investment universe
- Tokenization of ownership
Client onboarding is a challenging and often lengthy process involving topics like data privacy protection, risk and financial history as well as KYC and AML compliance. Also, onboarding is still largely a non-automated, manual process, susceptible to errors. Blockchain technology, specifically smart contracts, will make this a much smoother process. Smart contracts are secure and tamper-proof and record transaction histories while ensuring data privacy. Also an encrypted single point of truth (or “SPOT”) allows for significant efficiency gains in exchanging reliable client information.
Transactions and settlements are a basic and essential service level for wealth management. Blockchain applications will bring about improvements on both transaction time and transaction cost. Realtime settlement models will be possible using DLTtechnology and transaction cost will be greatly reduced. At the same time these applications will help reduce counterparty risk and risk management cost while improving capital availability. Lastly, blockchain technology will help enlarge the universe of security types – in the form of tokens – that can be traded and settled by market participants.
The value proposition of wealth management is largely the investment process – and the investment results – tailored to specific client needs and requirements. The investment process typically entails the work of a team of investment and risk specialists bringing to the table specific knowledge on asset classes and portfolio architecture. To a large extent, smart contracts are expected to manage investment processes and take the role of investment specialist or portfolio manager. The investment rules, client requirements and constraints will be embedded in the smart contract rule book and thus implemented in a completely frictionless and autonomous manner.
The investment universe evolves – but slowly. Most portfolios are still heavily geared towards equities, rates and credit with smaller allocations in private equity, real estate and some commodities. More recent additions to the tool box are private debt and insurance linked securities. The goal of portfolio architecture has been and remains to build a portfolio that delivers return for commensurate risk. The method through which this is typically achieved is diversification of risks and return drivers. Digital assets are an entirely new asset class that is uncorrelated to any traditional asset classes and offers completely new return drivers, e.g. exponential growth and rapid adoption of certain technologies. Due to those characteristics, even a small allocation – say 3-5% - will significantly improve the risk/return balance of a portfolio and thus offer strategic value to investors.
The tokenization of assets is going to radically change how ownership is managed, transacted and shared. The current focus is on investment assets whereby equities, private investments, real estate and venture capital is being tokenized. This enables fractional ownership and easy transfer and trading on a DLTenabled marketplace. And it opens illiquid asset classes to a much wider investment audience. This is highly relevant for Wealth Management because it enables the unlocking of hitherto illiquid client assets such as real estate, fine art, fine wine or jewelry. Down the road, intellectual assets such as patents or music rights will also be tokenized and that value can be released, monetized and transacted.
What solution(s) does your company offer that wealth and asset management firms should consider?
SEBA Bank is a fully regulated end-to-end digital banking provider offering a comprehensive suite of products and services to wealth managers. Wealth managers are custodians of their clients’ wealth and need partners that are competent, trustworthy and secure. This is especially true in the new and fast-evolving digital space.
1) One-stop-shop for digital assets trading and credit needs
SEBA Bank is a principal dealer for digital assets both in spot and derivatives markets. Execution takes place on an institutional-grade trading platform at very competitive terms. SEBA bank also offers unrivalled access to FIAT liquidity via digital asset loans.
2) Institutional-grade research and asset management fully dedicated to digital assets
SEBA Bank is a leading provider of innovative investment products on digital assets, leveraging proprietary research and in-house trading capabilities. We have deep knowledge on the value drivers of digital assets and how to manage a portfolio with non-linear properties. This experience has resulted in an excellent live track record of our proprietary cryptocurrency index.
3) Proprietary, highly secure and reliable safekeeping of digital assets
SEBA Bank employs a pioneering combination of physical, technical and financial security measures to provide peace of mind to our custody clients. Our suite of custody solutions is regulated and independently certified to the highest levels.
4) Comprehensive tokenization advice and solutions
SEBA Bank is a leader in offering bespoke tokenization services and flexible token structuring. Our services extend to integrated digital asset design, primary issuance and post-trade management services. SEBA Bank was recently selected as a tokenization partner for Banque de France and is working with a number of banks and asset managers on their tokenization plans.
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