Most people are still averse to buy and sell shares directly. With digital banking, the access to those potential client is getting much easier to establish and the German wealth manager DWS knows how it wants to go about it.
These are the numbers that drive wealth managers crazy: in Europe, 7 trillion euros are kept at banks, receiving a negative return. Eighty percent of Germans don’t own securities. In Switzerland, cash and savings deposits amount to 792 billlion francs ($803 billion), compared with 240 billion francs invested in funds, according to the central bank.
DWS, the wealth management unit of Deutsche Bank which recently had its IPO, wants to do something about this. Having emerged from the wings of its owner Deutsche, DWS now plans to become active. Thorsten Michalik, the company’s head of Europe (pictured below), recently explained how he wants to go about this.
It's Possible in Switzerland Too
DWS aims to take its products closer to the elusive customer, taking advantage of digital channels. The first step is at your local supermarket, where the company intends to sell vouchers for its funds, alongside mobile phone and shopping credits.
In Germany, DWS already is making a test with such an offering. Consumers can buy a gift voucher for as little as 50 euros, with a QR-code printed on the back (pictured below). The investor will then need to register with the fund provider before being able to choose from the company’s offering.
«It is absolutely feasible to launch the QR-codes with the fund vouchers in Switzerland too,» said Michalik. «We want to tap into new distribution channels and would love to be first with this offering here.»
Still, DWS would have to first put the conditions in place, such as a fund platform, alone or together with a partner.
More to Come
The vouchers are unlikely to remain the sole channels to get consumers hooked. The QR-codes are applicable on any other medium too, for example on a pay slip to enable employees choose investments of their liking with a share of their pension savings.
DWS also wants to get to the customer via their smartphones, not necessarily via its own application, but for instance via a partner such as Whatsapp. DWS in Switzerland has about 30 billion euros under management.
The strategy is to use quickly expanding digital channels instead of creating independent new ones, which is much more demanding. Michalik is certain that the strategy will pay off: «The retail market in the long run has a similar potential as the institutional business. On the one hand because of the not so deep penetration, on the other because we will be able to much better reach the retail client via digital channels in future.»
