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Switzerland has an opportunity to develop itself through blockchain technology and cryptocurrencies, but should beware of hot air, Sygnum backer and ex-UBS boss Peter Wuffli tells finews.com.

Peter Wuffli left UBS just as the financial crisis was unfolding in 2007, and the Swiss bank's internal hedge fund imploding. The former veteran of UBS has avoided the spotlight since he was thrust out of the CEO job. 

The 61-year-old spent the last ten years dividing his time between a board mandate at Partners Group, a Zug-based alternative asset manager, and Elea, a foundation he and his wife set up in 2006. The Swiss banker harbors strong views about UBS and Credit Suisse: he speaks freely and passionately about how the two Swiss giants have reinvented themselves since the financial crisis before catching himself (he has been out of banking for 12 years).

Wuffli met Sygnum co-founder Mathias Imbach in 20011, when the younger man volunteered at Elea for three months. Imbach clinched financial backing from Wuffli to start Sygnum, then later offered Wuffli a board seat. finews.com spoke to the veteran banker in Zurich about crypto, why Europe's banks are boring, and what lessons from UBS he is applying to Sygnum.

Peter Wuffli, what are the lessons from your 35 years in traditional finance and banking that are applying at Sygnum?

An obvious one is to beware of hypes and look at the substance of things. The world of finance is full of exaggerations, hot air, unmet expectations and overambitions. I have learned a lot from the ups and downs of finance, and about how to strike a healthy balance between ambition, pragmatism and realism.

How are UBS and Credit Suisse responding to Sygnum’s banking license?

From what we hear, interest has clearly picked up since the licenses were granted. Bank executives are asking their middle management to figure out whether this is just another fintech fad that comes and goes, or whether it is really transformational (laughs).

«We wanted boring banks, and we have them»

They are wondering strategically whether they need to commit to this, and what it would mean in terms of changes to systems but also mindset.

What does it mean for them?

I still believe that Swiss banks are very well-positioned because the global market with wealthy individuals won’t disappear. There continues to be a premium for good advice, and especially for serving complicated family and business needs. The problem is that it’s not a growth business as it used to be, which explains to some extent why valuations are where they are.

UBS and Credit Suisse also had ambitions in investment banking.

These are gone (laughs). Our societies wanted banks to be boring, and that’s what we now have. There were some European investment banks which were close to the global bulge bracket, but we lost it. Speaking as a European, that’s a pity.

What about the mid-sized and smaller Swiss banks?

The smaller banks very clearly see crypto as an opportunity for them to develop a new field and also create a sense of innovation. The financial sector in general and in Switzerland in particular is short on growth opportunities, so they are looking for new products.

What potential bubbles in the crypto field do you see forming?

I don’t see a bubble right now. I see more serious business planning and solutions addressing client needs, having learned from the last initial coin offering and bitcoin bubble.

And yet the cryptocurrency space remains fraught with risks of money laundering.

Anti-money laundering and know-your-client measures are critical. Justifying the trust the regulator has placed in us by granting us the banking license is of utmost importance to us. We’re the only licensed bank specialized in digital assets worldwide having fulfilled the required conditions in just five days.