Banking and technology are a long lasting marriage - banking is entirely dependent on technology. It is no coincidence that four of the major providers of core banking systems within the industry stem from Switzerland: Avaloq, Eri Bancaire, Finnova and Temenos. “As a country, we are very strong when it comes to supporting our banking industry,” says Ralph Mogicato, Independent Senior Advisor and Angel Investor.

With wealth managers, the situation is no different but here it is size that can differentiate. The likes of UBS will have thousands of people working within its IT department, a thumb rule is that is up to 20% of overall staff. Small and medium players naturally have fewer resources.

“Taking size aside, the key question is whether a bank sees IT as a tick box exercise, a series of pain points to be solved, or whether they see it an enabler, a means to innovate and provide customer centricity and value as well as add efficiencies and deal with the need to automate and have efficient and accurate compliance,” he says.

This is where there has been a change in culture as the role of FinTechs has come to the fore, not as something that is going to take over the entire world but as something that can plug into the existing system and either solve a problem, or provide the means to expand the offering and innovate.

“Banks are waking up to this and rather than seeing FinTechs as the enemy they are looking to collaborate in order to better their own offering - be that in a problem solving context or a means to innovate.” He thinks this is especially the case with smaller wealth managers. “They know that they do not have the internal resource to build in house and they find it easier to collaborate in order to enrich their offering,” he says.

This change in culture has been partly driven by advances in technology, SaaS and the cloud make life much easier when it comes to being able to consume technology. It is notable that both Amazon and Google now have a cloud offering in Switzerland and so wealth managers are able to use that and be totally in compliance with data storage and other financial legislation.

“These drivers mean that for those that wish to be simply a tenant of a service as well as those that want to use technology to innovate, the solution or the ability to do so is there. The idea around innovation is exciting though. Although neobanks have not made it into the wealth management sector yet there is no reason why they couldn’t. Existing players need to make sure their game is the best it can be,” he says.

Which FinTechs will be the most attractive though? He thinks that those either solving a pain point or offering something enticing to innovate have the most chance.

“We’ve seen cover-all robo advisors come into the market place but they have simply not taken off. Those that can plug into the existing ecosystem or sit on a platform a form part of the new wealth ecosystem will be the ones that succeed,” he asserts.

The crux of the issue is the interest from the wealth managers and the platform based ecosystem having enough critical mass with enough parts of the value chain being on each platform as well as those platforms being able to link to each other. “The key is for a FinTech product or offering to be actually useful; and solve a problem or create an opportunity rather than it being tech for tech’s sake,” he concludes.

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This article originally appeared in The Wealth Mosaic's 2020 Swiss Wealth Technology Landscape Report. Click here to access and download this report:
https://docsend.com/view/2b56ksz