What are the challenges that the Swiss industry faces?
Anders Bally, Co-Founder and CEO of radicant, commented: “One of the biggest challenges that banks face is that they do not understand the needs of their customers and how they evolve over time. This is because they hardly have any interactions with their customers – except for private banking. Over time, radicant aims to extend the concept of banking and become a life companion – to plan, execute and monitor financial activities saving time for its customers while aligning their financial decisions with a sustainable lifestyle. We have lots to learn from how private banks understand and interact with their customers. radicant strives to democratise great wealth services and make them available to all affluents using technologies. It will take some years, but we will get there!” 

Roger Furrer, Director of ERI, commented on the technology required to become more customer-centric: “Although we could be considered a legacy system, we have been making constant changes to become an open platform to form a part of the ecosystem approach. The approach is to offer the ability to FinTechs and third-party solutions to connect with us so we can add value to our customers. Connectivity is key when it comes to creating ecosystems and supporting digital transformation. We have also transferred our offering to the Cloud (private, public and hybrid) as well as expanded the offering service (Saas, Bpaas, etc.), and this is helpful to small and mid-size entities in particular.”

As a part of the ecosystems approach, how can the Swiss industry adapt to open banking?
Pius Stucki, CEO of Etops, thought there was still work to be done, saying: “Sometimes it does not feel like much has changed even if the technological advancements have been made. Digitisation and creating client value are still very much in their infancy, but this does create a huge opportunity. Open banking will have a huge impact. The goal of the OpenWealth Association is to create a platform with standardised APIs that will allow open banking to flourish. We already have some big banks live on Openwealth’s common API to get data from custodians, and we hope to get standard connectivity for the industry as a whole in the near future.” 

Bally agreed: “Without standardisation and willingness of the large banks to cooperate, it will take a long time to see open banking work in Switzerland. The ones suffering from this situation are the customers. They face a lack of convenience and transparency regarding their financial situation and have little flexibility in using multiple bank relationships to serve their needs in the best manner. We have a lot to learn from US and UK here.

“On the topic of understanding customers and how banks will evolve, we have a lot to learn from Asian banks. The bank of the future is not a bank; it is actually a super app, and the winners will be those that understand customers’ needs and service them appropriately. Embedded banking and wealth will come hot on the heels of open banking infrastructure, and the industry needs to be ready for that,” he added.

Indeed! There are traditionally three pillars of revenues for a private bank - from infrastructure services, AUM and product-related; the third pillar is providing advice. So, is the wealth manager’s goal to be the trusted adviser? What are the challenges of growing the third pillar?
Schuyler Weiss, CEO and Founder of Alpian, commented: “We are talking about the progression of digital initiatives and offering services through digital means. Humans, however, remain extremely important in wealth management, so ideally, the proposition should play to the strengths and qualities of each.”

And Weiss added: “People want help and see the value in the help and the advice provided to help them achieve their goals – as opposed to being provided with the tools to self-invest and navigate their own investments. The technology does the calculations, but the person is always qualifying that, and we believe that people remain important at optimising investments and creating wealth over the long term.”

Stucki agreed: “We can provide technology to reduce fees and provide efficiency, but we also need tech to enable advice and thus increase fee revenue. To achieve that, we need to bring innovation to the client via the human touch – enabled by technology.”

What can the wealth management community learn from other sectors when mastering the mix between humans and technology?
Bally commented: “We all know that the next paradigm is combining human and digital trust as we find elsewhere. Netflix is the obvious example. How is that done, and how could this be translated into wealth management to add to client centricity? We also see super apps understand their customers and evolve the relationship by providing the next best suggestions. The entity that owns ‘the last mile’ to the customer has the power.”

And Weiss added: “Switzerland is revered for its banking, but Revolut is the number one digital bank. That is because the experience is both pleasing and convenient, which promotes loyalty. Banks need to focus on making banking consistent with the rest of life. Otherwise, people will just go elsewhere.”

This article is a write-up from The Wealth Mosaic’s Swiss WealthTech Live Event 2022 to launch the Swiss WealthTech Landscape Report 2022. You can access the full report here.