Digitalization – defined as enabling or improving processes by leveraging digital technologies and digitized data – is booming. Julius Baer is joining these efforts: the group is creating the culture of a tech company within a bank, aiming to lead the modernization of wealth management. Banking, and in particular the Retail sector, is digitizing at a high speed, deploying AI, robotics, and other technologies to improve the client’s experience. With regards to the wealth management industry, personal relationships are and will always remain at the core of the business. Nevertheless, there are processes, which can be automatized and free up time for Relationship Managers to focus on personal interaction with clients. As part of this, the Swiss group has invested 90 million CHF in digital and client-facing solutions and tools in 2020, it has trained 1200 participants in leadership training last year, and plans to have a significant part of their staff using agile ways of working by 2025.
Julius Baer manages assets for private clients from all over the world. The firm’s services consist mainly of wealth management and investment consultancy, providing products via its open-architecture platform as well as securities and foreign exchange trading. Therefore, having state-of-the-art technology is crucial for their success. The Bank is a founding partner of F10, a global innovation ecosystem with offices in Zurich, Singapore, Madrid, and Barcelona. At the Wealth Tech Awards 2021 of Professional Wealth Management (PWM), a magazine that is part of the Financial Times Group, Julius Baer was named ‘Best Digital Innovator of the Year, Global’.
Indeed, 2020 and 2021 have accelerated the pace of tech adoption, arguably making it one of the bank’s core competencies and widening the value it offers to its clients. The bank’s innovative efforts mainly focus on the quality of service and advice, digitizing internal processes, analytics, digital trading, and cyber security. One successful byproduct of these efforts is Spark, launched in 2019. Spark is a structured products engine that combines AI and big data to equip intermediaries to build personalized solutions for clients in just a few seconds. On a path of continuous innovation, Spark has already received several hundred additional improvements, supported by a team of software engineers, quant specialists, and business analysts/project managers. Another innovation gaining traction is the Digital Advisory Suite: effectively an automated fintech advisor that helps relationship managers select suitable products for their clients that comply with complex global regulations. Data science has considerable potential, helping to understand what individual clients need in terms of investments and servicing.
Most importantly, in order to improve the client experience further, Julius Baer is directing efforts towards a new digital client onboarding app, a new WhatsApp messaging channel, and a digital distribution of their publications by their experts. Learning from ‘big tech’ firms like Apple and Amazon, the Bank is finding creative ways to use technology to lift the experience of its clients to a whole new level. According to Philipp Rickenbacher, CEO, “in the critical last mile to the client, so to speak – we have invested in new ways of staying connected, creating two-way communication and truly networked interactions with our clients: digitally, through secure WhatsApp channels in Switzerland, Singapore, and Hong Kong, and we are now even piloting this solution on Asia’s preferred WeChat application. We are also deepening connections with and among our clients through communities”.
It is important to notice that other Swiss FinTech companies operate in the same sector as the banking market, but offer different services and opportunities, and both work to each other’s advantage and foster digitalization efforts in the country. Swiss Fintech companies mainly comprise payment systems, investment and asset management services, stock exchanges, crowdfunding and crowdfunding platforms, insurance companies, insurance technology, and distribution and information platforms in the areas of collective investment schemes and other financial instruments.
One noticeable example is Alpian, a new digital experience, which aims to create innovative new banking services tailored to the affluent masses with personal wealth management offerings, bespoke investment products and easy-to-access apps. The company hopes to one day democratize complex financial products and services in a simple, transparent, and cost-effective way. Another leading FinTech is Zurich-based Numbrs. The app aggregates multiple bank accounts and enables users to link them to the platform in order to track and manage their income and expenses. FinTech allows for the transfer of money to SEPA countries, provides notifications and reminders of scheduled payments and budget updates. These start-ups, among other established technology companies like Additiv, Avaloq, and Temenos, showcase the booming digital environment in Switzerland and how technology plays an increasingly important role in the success of the financial sector in the country.
