The CEO of the newly licensed digital institution promises a very different kind of private bank - and doesn't completely eschew brick and mortar.
Mr Weiss, Alpian just received a banking license from Finma. When will you start?
We will officially open in the third quarter of 2022. We have conducted many tests and expect to start operating internally for employees before that as a way of getting some initial, concrete feedback.
How long did it take you to get a banking license?
About two years. We applied for it in April 2020.
Were there any obstacles on the way?
No. Finma simply has very high requirements. There were no delays. There should be a high entry threshold given that clients will be trusting us with their assets. It is very understandable for Finma to take the time that it does.
What license did you receive?
We looked at the fintech license. But it did not come into question for us given that we would not be able to offer all the necessary products and services. That is why we chose to get a full banking license.
How many people does Alpian employ?
There are 35 staff in Geneva. We also have offices in London and Rome, which brings us to about 70 people.
«We intend to open an additional branch in Zurich this year»
We have grown very quickly. I was the first and only employee two years ago when I was Chief Digital Officer at Bank Reyl. We intend to open an additional branch in Zurich this year. In the medium term, we want to have offices in the entire country.
How about Ticino - do you plan to open an office in Lugano?
Yes, absolutely, and one that is independent of Reyl or Intesa Sanpaolo, as both of them are already there. Ticino is an important market for us. We want to be close to our clients everywhere and speak their language.
But you can offer services from anywhere as a digital bank. Why do you need a physical presence throughout the country?
Communicating in the appropriate language is central to us. We need capable employees who can talk to clients in German, French, Italian, and English. There is a very limited pool of expertise for that in Geneva. We have to have enough resources and link that with suitable levels of competence. We intend to be a digital Swiss private bank with a country-wide presence.
Who are your target clients?
We only intend to serve clients who live in Switzerland. I often hear that Switzerland is too small a market to be profitable. But we are a digital Swiss private bank and our core business is the domestic market. Swiss clients should be able to take advantage of what we have to offer.
Going by your earlier announcements, it seems like you are mainly interested in affluent clients. How do you define the segment you are targeting?
We certainly won't refuse individual clients who do not have a particular minimum. But our targeted asset bands lie between 100,000 and 1 million Swiss francs. Our offering takes its cue from private banking and it is aimed at clients who have a certain level of assets. We are not a retail bank.
«The first transfer has to be at least 10,000 francs when opening an account»
We want to give our clients the opportunity to substantially increase their wealth. And 5,000 francs is not enough for that. The impact of our investment products would be too small. But I also want to make it clear again. We are not categorically refusing to bank clients with less assets. It just that they will see very little benefit.
How do you become a client?
The first transfer has to be at least 10,000 francs when opening an account. Clients can choose between discretionary and advisory mandates. The minimum level of assets required for a discretionary mandate is 30,000 francs; for advisory mandates, it is 10,000 francs. That is less than it would be at a classical private bank. But for us, the first transfer means that the client has made a certain commitment to work with us.
What does the client get for their money?
I would have to go in some depth about that. Neo-banks like Revolut and N26 offer clients access to all kinds of financial products. But the client then has to decide for themselves what they want to do. We do not have a pure «open architecture» but a curated selection for clients that combines our know-how with the global investment universe.
«We want to have 5,000 clients by the end of the year.»
Clients can communicate with us through our app. They can get advice about what the best investment for them is. That is how we justify being a digital Swiss private bank. We only employ experienced client advisors from leading banks.
We also offer payment services, foreign currency exchange and debit cards as we are a bank. But I would also like to emphasize that we are not a fintech or a robo-advisor but a fully licensed bank with attractive investment products and advisory services offering the usual services for daily payment needs.
What are your targets?
We want to have 5,000 clients by the end of the year.
That does not sound very ambitious.
Not compared with other digital banks. But our objective is not to serve a maximum number of clients. We are a digital private bank and we have a personal relationship with every client. They should have the feeling that we are not simply trying to pump out a mass volume business to them.
Do you have any targets for assets under management?
Yes - but I am not in a position to disclose the target. We do not expect that clients will trust us with all their wealth at the start. It takes time. We are starting with realistic goals and will build from there. Putting a concrete number out there would be sending the wrong signal. Building trust takes time.
When do you want to be profitable?
It is not our target this year. We have to build a solid business model first. We want to avoid simply burning through cash like the other neo-banks do. We are looking to break even by 2025. That is a fair target.
What happens if I choose an Alpian mandate?
We offer many financial products in our investment universe that are tailored to client's needs and risk capacity. We do that in a far more individualized and comprehensive way than a normal digital bank does, and where a client is usually left wholly to themselves.
«Alpian will have very competitive management fees»
We undertook a survey with the Alpian app and found out exactly what clients wanted. It goes in the direction of active investing for those who were not previously served by a private bank.
What does the client have to pay for that?
Alpian will have very competitive management fees based on the level of assets held with us. They will be less than 100 basis points. That includes investment recommendations, management, product offering and monitoring, Alpian investment research, partnerships with third parties related to data and analysis, transactions, management fees and access to specialists.
«A total of 48 million francs was invested»
On top of that, there will be product costs and taxes. That will vary from client to client. Products chosen by Alpian will not have any retrocession fees due to the asset managers that we work with. We have negotiated advantageous conditions that are not normally available for private clients.
Digital assets are in trend. What is your offering in that area?
We don't yet offer any direct investments in digital assets. We will offer a limited number of crypto assets if clients want them.
How much money has been invested in Alpian?
The seed money came from Geneva's Bank Reyl in 2020. The project was part of the bank then and I was the Chief Digital Officer. External investors then participated in two financing rounds after which the private banking arm of Italy's Intesa Sanpaolo took a stake. A total of 48 million francs has been invested.
Who are the majority shareholders?
We only have large minority shareholders. They are Bank Reyl and Fideuram Intesa Sanpaolo. As is the case elsewhere in private banking, we do not disclose who the other shareholders are.
Do you have an investment in Alpian?
Yes, through our employee participation program.
Schuyler Weiss is a dual U.S.-Swiss citizen and he has been CEO of Alpian for the past two and a half years. Previous to that, he joined Bank Reyl in 2018 as the Chief Digital Officer. He has worked at U.S. investment bank Morgan Stanley and as an IBM consultant. He grew up in the state of Rhode Island. His grandfather immigrated from Switzerland to the U.S. and Schuyler Weiss often thinks it remarkable to find that he has returned to work and live in Geneva.
