Digital innovation in banking has to date focused on managing the “quick money”: making routine transactions easier with fast payment from any device, one-tap transfers and anywhere access. With fintech innovations such as pay apps fast eroding their traditional business space, do banks have to follow suit?
For Swiss banks in particular, the answer might lie in taking digital innovation to the “slow money” challenge: long-term asset management, dealing with pensions, property and other assets. It’s an area where Switzerland traditionally excels. In fact, the Swiss Bankers’ Association (SBA) estimated in 2018 that Swiss banks held no less than 25% of all global cross-border assets, accounting for a sizeable chunk of the 6% share Switzerland’s banking sector contributes to the country’s GDP.
In a recent study, Cognizant argues that resolving people’s slow-money challenges is the next digital imperative in financial services. This should be a challenge that Swiss banks will relish.
Leading the field
Giants such as UBS and Credit Suisse are already well on their way, showing it is not just the agile fintechs and wealthtechs that can drive business through digital transformation. Realizing that smart startups would soon be encroaching on its traditional space, UBS has established a unified tech platform for its wealth management business. Its client-focused five-point strategy uses many approaches common to “fast-money” management – such as AI, robotics and cloud technology – to transform its slow-money management.
Credit Suisse is also focusing on unifying its platforms. As well as setting up a digital ecosystem that pulls together all Credit Suisse services, the bank has also been forging alliances with fintechs such as Canopy for new digital services. Credit Suisse private banking customers now have the possibility of aggregating the management of all their assets on a single, easy-to-handle platform.
More revenue with smart management of slow money
Combing wealthtech with traditional asset management could play to the strengths of Swiss banks, particularly if they mine the expertise of startups in new alliances. Cognizant estimates that banks can achieve a combined cost and revenue improvement of 14.2% by getting the slow-money challenge right. If Swiss banks and financial service providers can combine their global clout in managing money with smart fintech and wealthtech innovation, they could be unstoppable.