In a fireside chat with Thomas Fischer, Avaloq’s Chief Banking Operations Officer on the Swiss company's 15th anniversary, our CEO highlighted the role of facilitator that the ABBL intends to play between the banking and fintech worlds.
He reviews for us the main points of his presentation.
Banks and fintechs are sometimes described as competitors. What is your opinion on this issue?
"In some way fintechs, can be competitors. But, on the other hand, they are also part of the solution to the challenges faced by our members. And this is because, we are fully aware that we will never be able to develop in house all the applications we need to digitize our processes. So in a nutshell, banks need fintechs, as much as fintechs need banks!"
Are fintechs the magical solution for banks?
"By developing partnerships with innovative players, banks can indeed gain agility, transform themselves more efficiently. One of the difficulties for banks is that they have to deal with ageing, inflexible systems. To develop these IT environments, complex and costly projects have to be carried out. By working with fintechs and integrating the solutions they offer, we can more effectively generate added value by optimising certain processes or improving the customer experience. But, if we are honest with ourselves, fintechs are not the magical solution to all our problems. Because integrating their products is often not a simple plug and play exercise, but a challenge both from the IT side, as in business terms."
Private banks are often depicted as lagging in terms of digital transformation. What is your take on this?
"There might be some truth in this. But this is mainly because private banks deal with customers who, first, value personal contact and service and second, mostly expose to their banks complex situations with layers of diverse family situations, ownerships structures, international exposures, multiples jurisdictions. Wealth techs, like those using AI to support advisers in their data analytics or in their portfolio management may be helpful. Green techs too, when they help customer relation managers take into account and implement sustainability issues. But in many cases, responses to the complex situations of high-net-worth individuals are often difficult to modelise and thus to digitise. So solutions mainly will be phy-gital."
Certain critics say that the fact that banks are slow adopting digitalisation because CEOs and managers at C-level do not have any experience of the digital or fintech world? How do you react to this?
"I think times they are changing. Most managers I see are in their fifties. They are not bedridden. And they are quite technology savvy. But still, we are conscious that there is a challenge. And we want to address it through our fintech circle. Most people do not know that of the 240 ABBL members, half are not banks and some thirty are fintechs, like Avaloq. We see our role as bridging the gap between the banking world and the fintech world. And when it comes to the issue of awareness raising at management board level, we recently launched a new initiative and invited bank CEOs to meet with fintech players for a speeddating. We expected to receive about ten participants. In the end, there were more than twice as many, including CEOs of the largest institutions in the market. The mobilisation of executive managers around these subjects reveals a strong desire to transform their institutions by capitalising on digital technology."
So we learn that the ABBL is very active in the area of fintechs and digitalisation. What can a company do to contribute to this mouvement ?
"Whether you are an ABBL member or not you can join the Digital Strategy Committee. This forum’s aim is to create a strategic dialogue between ABBL members and key external stakeholders to foster innovation and digitalisation in the financial services sector. It acts as an executive committee to relevant working groups and works closely with the other ABBL business groups."