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Job Cuts: a Must That Hurt

He however left after a conflict with the owners of the bank and before having been able to tackle the bank's biggest problem: operating costs that stretched the revenue base of the bank. Falcon accumulated losses of 156 million Swiss francs ($157 million) in 2016 and 2017.

It was left to Keller to deal with costs. A program initiated to cut 50 jobs backfired as key personnel decided to leave the bank and assets under management declined to 10 billion francs from 14 billion francs. The innovative idea of managing crypto assets was doomed to failure if the rest of the bank stopped performing.

IT and Compliance Costs

With about 250 members of staff based in Zurich and Dubai, Falcon now has an appropriate size, Keller told finews.com. «In addition, we are looking to use all possible ways to cut costs.» IT and compliance are areas that have become expensive divisions at the bank, with IT oversized and compliance at an elevated level due to the work with the enforcement procedure initiated by Finma.

But Falcon can reasonably expect to overcome these worries soon. Finma will allow Falcon to take on assets from politically exposed people starting in the second quarter of 2019. The bank is gathering pace again, Keller said. «We are investing strongly in an expansion of the front area and in hiring additional relationship managers.»

Digitization Push

Keller won’t redefine private banking, but his team has identified a few strategic weaknesses that need to be rectified. The bank will advance the digitization of its advisory services and the discretionary portfolio management.

Falcon in future will apply a multi-custody strategy with an aim to offer clients with diverse banking relations a consolidation of their portfolio and a risk management to match.

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Mubadala Trump Card

Keller will also hire additional staff for the crypto business. Falcon will offer custodial services, block transactions of digital assets and cooperate in initial token and coin offerings.

Mubadala will become Falcon’s trump card. Falcon wants to make co-investment deals with the fund, which may also help direct clients to the Zurich-based institute.

Attractive Employer

Still, Falcon will have to rebuild its team of relationship managers if its wants to implement its strategy properly. It aims to add about 20 senior advisers in Zurich and Dubai over the course of the next three years.

«I believe that Falcon Private Bank as an employer has an interesting story to offer,» Keller said. «We have a strong shareholder that aims for significant growth. And we are in the middle of a restart that offers individual creative freedom.»