This panel looked at the raison d’être behind digital wealth management and its differentiation points. It featured Marion Fogli, Deputy Chief Executive Officer at Alpian; Mark Bagnall, Advisory Board Member at Figg Wealth; Tillman Lang, CEO and Co-Founder at Inyova Impact Investing; and Alexandra Lau, Member of the Executive Board at BLKB.

Topics covered included:

• Drivers for digital wealth.
• The importance of an engaged and connected client relationship.
• Thinking about technology as opportunity versus cost.

The panellists dived straight into the key drivers behind digital wealth management. They felt that underserved client segments between mass retail and private banks combined with democratising access to wealth services were both compelling reasons for wealth managers to offer a digitised offering. The limitations of pure robo advisers were also discussed – particularly regarding the need to have a human touch when dealing with complex affairs.

Indeed, a lot of the best financial services have been traditionally exclusive to very wealthy people, and they were looked after by highly-paid, well-educated human bankers. That model does not work at the mass affluent level because the cost to serve is too high – and yet there is still a need for investment advice.

Serving the needs of the mass affluent
Folgi summed up the issue well: “In Switzerland, we have traditional banks and private banks. But in between those two there is a large mass affluent population that is underserved and in need of both day-to-day banking and wealth management. They need advice, financial education and guidance, and a personal relationship, and are willing to use digital means to access all those things.

Thus, the impact of technology is in making access to wealth management possible for the mass affluent segment because the delivery of the service is less cost intensive than within the traditional private banking model.

Differentiation – client centricity and personalisation
The panel went on to explore how new digital wealth management firms differentiate when it comes to client-centricity and personalisation – using new technology stacks and Artificial Intelligence (AI) to centralise data for a single client view that is holistic in approach and able to move with the client to remain relevant and empathetic. 

Bagnall explained: “Our offering is a platform where the client can have an aggregated view of their wealth. That feeds into personalisation because we use AI to connect total wealth across all asset classes and institutions and advise accordingly. That is a very different proposition from a bank only knowing about the proportion of the client’s assets held with them, versus having a holistic view of their total wealth.”

The ability to pivot using the new technology stack and offer value-added services like impact investing, flexibility, accessibility, and financial education for target demographics compared to traditional players was also discussed.

The panel also reflected on the importance of maintaining the human element in any client relationship, suggesting that the early robo-advice model had not been successful in meeting the needs of the mass affluent due to the difficulty of moving away from personal relationships in favour of purely algorithmic models. Instead, new digital wealth managers prioritise hybrid, and impact-driven value propositions that engage the client and lead to ever-deepening relationships.

Lang commented: “There are very few companies that have actually become big with a pure robo-advice model. One of the realities is that the personal relationship still counts for a lot. This is still a trust-based industry, and there needs to be an emotional connection with the client.”

However, unlike the private banking world with its heavy reliance on face-to-face, the digital model gains trust with the quality of the product and convenience, the 24/7 real-time availability, and an openly sustainable approach; this latter is fundamental to Gen Z and Millennial generations that make up most of the mass affluent segment and have a very different value system to their predecessors.

Technology philosophy differences
The conversation then switched to look at how digital wealth managers emphasise technology as an opportunity for value creation, rather than seeing it as a cost centre. This contrasts with many traditional firms that are still focused on digitisation as a transformational cost rather than as a business driver.

Bagnall comments: “It makes sense to think about the marketing and the value proposition before you build the product, but then it needs to be driven by technology so that we can have greater impact when it comes to our business model and scaling it. It's about a way of thinking when compared to traditional banks that see strategic digital transformation as a cost rather than an opportunity to drive the business forward.”

Lau then talked about how BLKB hopes to apply what it learns from its investment in radicant into its own business. “From our perspective as an investor, we have a close collaboration, and we are strategically aligned. It's a two-way street, so you're giving to them and hopefully receiving back at a certain point in time. For that to happen, both parties need to agree on strategic alignments and really make sure that synergies can be realised,” she concluded.

About the Swiss WealthTech Live 2024
Our Swiss WealthTech Live 2024 event took place in Zürich in February and hosted some 160 market participants from private banks, cantonal banks, external asset managers, family offices, technology vendors, consultants, and more to express their views, experiences, and visions for the future. We celebrated a full day of keynote presentations and panel discussions, with plenty of networking opportunities.

During the event, we also released our Swiss WealthTech Landscape Report 2024. This issue of the report includes 24 thought-provoking articles, 10 Solution Showcases, and 539 entries in our Solution Provider Directory.

Access the full report here.