Alpian, the first digital private bank in Switzerland, combines everything you would expect from a private bank – but with a difference. It was set up specifically to serve the mass affluent segment; those with around CHF100,000 to 1,000,000 of liquid net worth. Its model is to marry traditional private banking experience, including access to a wealth manager, personalised investment services, access to capital, and everyday banking – but all within an app and at an affordable cost.

Schuyler Weiss, CEO at Alpian, explains how the bank’s format is based on filling a gap in the market in terms of both the segment and the proposition itself: “Our offering is focused on growing wealth, unlike retail banks that prioritise interchange rates which revolves around the spending of customers. We have a managed discretionary mandate which has an entry threshold of CHF30,000. This contrasts with most standard wealth offerings at private banks which require an initial investment of CHF500,000. Our fees are also lower at .75%, with 1 to 1.5 % generally charged by standard wealth managers. We received our Swiss banking license in March 2022, and we are backed by industry leaders Fideuram Intesa Sanpaolo and Reyl Intesa Sanpaolo. Their backing gives us enhanced gravitas and presence.”

Weiss explains that the service is exactly what you would expect from a private bank in that it is looking to grow clients’ assets and that the clients get access to a reputable and experienced team - put together from incumbent private banks. The difference is that we do all of this digitally, so instead of having face-to-face meetings, we have virtual meetings securely facilitated within the mobile application. This is effective in terms of ease for the client and logistics for the bank.

But why now? Switzerland has seen forays into digital banking before. The first Swiss digital private bank, Bank Leodan, went bust in 2016. And another, Flynt, also went bust in 2017. UBS cancelled its online wealth management pilot, Smartwealth in the UK in 2018. And in 2019, three Swiss-based Robo-advisers also went out of business.

Timing, it seems, is key. Covid-19 obviously forced widespread acceptance of everything digital and pushed it into the realm of the necessary when it comes to customer experience – which is now king and something that all banks are prioritising.

But something else banks are also focusing on is cost to serve. And having a modern tech stack that serves customers digitally has reduced this significantly.

Hence why the bank is able to offer the service of a private bank at an affordable cost to a demographic in need.

“In every industry, you tend to get three tiers, retail, premium, and luxury. But in financial services, the premium tier is missing, and investors that are neither one nor the other have to fit into the retail tier where their needs are simply not met. Our research showed that this was a serious gap in the market and that people in the affluent segment still wanted help growing their wealth and access to sophisticated investment methodologies and personalisation. We also found that they would be more than happy to have their costs lower by having a digital offering.”

The strategy has been to place heavy emphasis on an excellent user experience and, in doing so, onboard clients at the start of their wealth experience and maintain the relationship with them throughout that journey.

“Looking into the future we know that today’s mass affluent is tomorrow’s high net worth – and given that today’s mass affluent is most likely to have been born with a smartphone in their hand, you have to meet their cultural and functional needs. In that sense, we need to meet these clients where they are in terms of the offering and delivery, be more relevant and exciting to them, and retain their interest throughout their journey; it is all about the optichannel,” he says.

This is, he says, where the personalisation becomes even more important than at any single static point in the client lifecycle. “A big part of this is personalisation so that we know exactly where someone is in the client lifecycle and what their aims, hopes, and causes are at a point in time. We think personalisation is a very key facet of our offering and one that we do on the same scale as traditional private banks so that we can offer the same level of service and pinpoint accuracy that will delight the client and mean that they continue their journey with us.”

“To do all this, we knew that we would need a digitalised tech stack that can offer second-to-none functionality and experience. Our core banking platform is Temenos, and all our data is encrypted and resides within Switzerland through a partnership with Google Cloud,” he explains.

The bank has taken a microservices approach, which has been an iterative process. “We started with the things we know we need, and built around that as a need or function has become apparent. We have gone for a mix of partnerships and a split between established players and newer startups. What matters is what is on offer. It takes a lot of work to find the right partnership for a given function or issue, so we need to get it right.”

The bank has undertaken the selection process using its own commercial team, who have surveyed the market and then gone through the RFP process. Weiss cites non-negotiable criteria: security, competitive pricing, ease of integration, and functionality.

When it comes to the ease at which the bank has been able to go about this process, he agrees that the market is vast and that it is difficult to differentiate between vendors at times. “Sometimes nothing really stands out, and you might get five or six vendors who have more or less the same sales pitch and product, but what they are lacking is being able to specify how their solution fits into our specific proposition and how specifically they will work with us and our business. We want our vendors to have done their homework and to have thought about our unique needs and how that would work in practice. You have to show that you can fit in with us and not vice versa- we want to see a bit of intelligence and forwardthinking,” Weiss says.

By getting the right mix of demographic, service, and cost, the bank has so far enjoyed good levels of interest.

“Take up has actually been greater than expected, but at the same time, we neither have been nor want to be viral. This allows us to focus fully on our new clients and work very closely  with them rather than potentially spreading ourselves too thinly. All the work done to build trust so far has worked, and we anticipate this to continue as we grow and evolve with our client base,” Weiss says.

He explains that in 10 to 15 years, the suite of services will have evolved with today’s client base. “We will help them to grow their wealth and be a holistic partner that helps them to identify what they want to do with their wealth and what their options are and what the purpose of their wealth is.”

This article is from The Wealth Mosaic’s Swiss WealthTech Landscape Report 2022. Access the full report here.