Philip. J. Weights, President Swiss Finance + Technology Association, kicked off the panel discussion by explaining how society has gone through generations of revolutions and innovation in technology to get to where we are today. Throughout that, the role of the board has been to manage risk and change. 

“It is a process comprised of rules, regulations, and oversight of all business activities. I would argue that the board’s role is changing in the same way that tech is changing. The board’s composition will have to change with that, so it continues to be fit for purpose,” Weights explained.

What is the role of the board as it relates to technology?
Put simply, the role is to assess, approve, and oversee the strategy and then to hire the CEO and executives. But it is clear in c-level conversations that Swiss boards do not have the necessary technological know-how and expertise, and that is a huge issue.

Alexandra Lau, Member of the Executive Board, Head of Corporate Development and Sustainable Asset Management of BLKB, added: “I would not limit the role of the board to governance – they need to have an open and entrepreneurial mindset and be aware of the development and trends in the market and have the willingness to make changes and explore new avenues. For example, with the radicant project, our board was keen to invest in building a digital offering but soon realised that our legacy technology was an inhibitor. To be completely customer-centric, it made more sense to build the tech from scratch. So that is what we did! We also have our CFO and a representative from our bank’s board on radicant’s board, but we share the understanding that the venture needs to have the freedom to go forward and do its thing.”

One example of how you delegate decision-making is by having a committee. Is that a good idea if boards do not have the skill set to govern the technology they are responsible for?
Steve Round, Founder of Saascada, gave a recent example: “A bank whose board I sit on in Uganda has created a Board IT Strategy Committee to oversee with management the IT strategy as well as implementation ensuring the wider strategy is taken account of, but everything has to still finally to go through the board. The committee is merely the forum to bring in expertise and experience. The challenge is that banking has moved on at a pace, so the knowledge and expertise at board level need to change too. The board needs the ability to look at the art of the possible and what tech would be needed to deliver that. Sometimes you need a special committee, with input from externals too,” he said. 

And Fabian Kaslin, Former COO/ CIO of BIL Suisse, added: “Introducing new technology and a new culture is an interesting thing to introduce to an existing entity. But the lesson from the governance perspective is that the board has its role and can only push so far. Pushing too much can lead to people feeling overwhelmed and brings about negativity; you need to be patient and set out guidelines but in the end, leaving it to the executive committee means that governance layers do not get mixed up.”

What do you think technology will look like by 2030? And what will boards need in terms of knowledge and experience?
The best boards have curious people who want to understand what is happening in the wider world. But boards do need to move away from risk and fear and go more towards transformation and being trusted advisers. Most Swiss banks are going the right way in terms of what they can do and in terms of cultural change and innovation. They are getting better at exploring the art of the possible when it comes to business transformation. 

The need is to go more into what is the real business value of something; if it does not move the needle, then what is the point? Another thing boards need to understand is the value that we can deliver for our customers through the power of data - it is phenomenal!

Kaslin explained that smaller banks need their boards to understand the advantages of agility. “Smaller banks can be more flexible and can do things more quickly. They do not have massive risk departments and can distinguish themselves from the service they can deliver. This is actually an opportunity to innovate and be agile if we can find the right partners to help us. Innovation will work in our favour. But the board needs to understand that.” 

Indeed, longer-term shifts and the role of technology are as important as specific projects. 
Indeed, for a long time, all people looked at was scale, so as long as you could show that, then all was fine. Wealth management as an industry needs to move away from scale via transaction volume and instead look to profitability based on advice and customer retention.

Round agreed: “It strikes me that the challenge, and the opportunity alike, are immense. With embedded finance, this will be all the more so, and we need to look at what the customer needs and where you can best deliver that! Technology is a key enabler, and the board needs to be up to speed.” 

Tavor concluded: “The issue is who will control the interface in the future. Banking is a hard business and to think that pure tech providers will get into that beyond being purely transactional is difficult to imagine. When it comes the who controls the customer, the answer is still banks. There is a massive opportunity to make a real difference to the lives of their customers - with the intelligent use of technology.”

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.