The Swiss private bank's information technology roll-out is a key part of its growth strategy. finews.com spoke to finance chief Dieter Enkelmann about next steps.
Zurich-based Julius Baer started the mammoth task of renewing its information technology platform three years ago. In 2015, the bank took over Commerzbank's Luxembourg's arm – primarily because the unit already used T24 software used by Swiss provider Temenos that the Swiss bank also wanted.
Three years later, the new software is humming in Luxembourg, where Julius Baer books its European clientele. By contrast, its Swiss and Asian arms are still operating on antiquated systems. Asia is in a test phase with T24, Chief Executive Bernhard Hodler said on Wednesday. The bank hopes to migrate to the new platform by mid-year.
Switzerland, which still books the bulk of the bank's clients, is the laggard: first integration moves are planned for year-end, but Julius Baer's home market won't be transferred to the new system before 2020, finance chiefDieter Enkelmann told finews.com.
Immense Budgets
The undertaking is absorbing resources at an alarming rate: the bank has already spent 400 million Swiss francs, according to several sources. For comparison, Postfinance switched in a new IT infrastructure for an estimated 150 million francs, while UBS' invasive overhaul is expected to cost more than 1 billion francs.
The high up-front fees pay out later: once rolled out, banks can launch their products and services less expensively in individual markets at the same time, keeping to local regulations. Until now, this has only been possible on a case-by-case basis.
Tech top-ups like new e-banking or mobile banking services can be replicated into several markets thanks to the unified platform for a fraction of the costs of doing so piecemeal. The bank has also given its private bankers a digital assistant to help with regulatory questions, make trading recommendations, or rebalance portfolios.
Roused from Slumber
The idea? Free up private bankers of reams of paperwork to actually spend time with clients. To be sure, the newfound efficiencies are also helpful in the battle against falling margins – Julius Baer's slipped to 90 basis points, from 91 the previous year.
Julius Baer's copious spending reflect years of lagging its rivals in terms of arming itself for digitization or cooperating with fintech. The bank has made strides in the last year, including hiring Christoph Hartgens as digital chief – its first ever. He is responsible for integrating the bank's various digitization initiatives and putting them at the disposal of clients.
The bank also began funding the Swiss fintech booster F10, led by Swiss stock exchange operator SIX, where it directly supports three start-ups. «The insights gained help us to evaluate the integration of fintech solutions into our value chain», the bank wrote in its annual report. Julius Baer also took a considerable stake in Swiss tech firm Nectar last year.
