FNZ has been on an international shopping spree. Most recently, the provider of customized IT and regulated services for financial institutions and asset managers acquired companies in Germany and Luxembourg. There is enormous potential for organic growth in Switzerland, country head Philippe Bongrand tells finews.com.
Can you name some reasons why clients come to FNZ when it comes to digitalizing asset management?
Companies are investing more in technology, which is good. However, the return on that investment is going down. This was highlighted recently in a paper we joint-authored with BCG – it showed poor cost-income ratios for many wealth managers.
What we are offering is outsourcing. We offer three things in one: technology, infrastructure, and investment operations because it allows us to capitalize on the synergies between them. Other firms offer parts of this, but we can do this end-to-end.
«Asset management is very complex, and there are a lot of inefficiencies»
Only if you work across the whole value chain are you able to strip out the complexity and generate benefits. If you buy a bit of that from this supplier and another from that one, you still have to stitch it all together – this is painful and inefficient.
Is the cost aspect a main driver?
There's a lot of complexity in wealth management and there are lots of inefficiencies you have to deal with. And it is cost intensive to solve this on your own. So, clients come to us basically for two reasons, cost, and growth. It doesn’t make sense to only look at the cost if it keeps you from expanding your business.
You can't achieve greatness just by working on costs. If you think long-term, it's more about getting a platform that supports your growth. For most clients, it is a mix of costs and improving operations efficiency, revenues, and growth.
FNZ is in Switzerland since 2016 and you already acquired two companies. Is there more to come?
Our strategy has always been to have a mix of organic and inorganic growth. At the end of 2021, we acquired first Appway and then in 2022 New Access.
«We serve three types of players in Switzerland»
Now we have about 200 employees across three Swiss regions, Tessin, Romandie and the German-speaking part serving a hundred clients. But as we see it, it’s the very beginning of our journey in Switzerland. We still consider ourselves small with tremendous potential.
Which types of companies are in your main target group?
We are serving 3 types of players in Switzerland: wealth managers, private banks, and insurance companies for their investment offering. What we offer is the fact that we reduce complexity by taking full ownership and accountability by providing a scalable fully digital platform fit for growth.
What are your ambitions in Switzerland and elsewhere?
We have very high ambitions – ultimately, we want to use cutting-edge technology to open up wealth and help everyone, everywhere to invest in their future. We have barely scratched the surface of our growth potential, both globally but also in Switzerland. Our business model is very scalable.
You are not the only company developing solutions for wealth management. Who are your competitors?
We are competing with the solutions that banks develop themselves and with other software and tech firms. Our end-to-end platform is truly unique, and this differentiates us.
How is the Swiss market different from other regions like let’s say the UK, the USA, or Asia?
Switzerland is by far the most advanced and complex market. The complexity of the operating model, the high expectation of the clients, and the fact that most wealth managers operate cross-border sets it apart.
«There's $7 trillion in assets at stake»
In Switzerland, you can walk into any financial institution, and you can get an account managed in any major currency. Where else can you do that? This is the reason for the complexity and the high demands of the end clients.
And this has pushed the level of excellence and expertise in Switzerland to a level that does not exist anywhere else in the world.
How can your business here help you in other countries?
Switzerland itself is a substantial market. It's about seven 7 trillion CHF of assets. Compared with 250 trillion dollars globally, however, it's not the biggest market. There are very few countries in the world where you have a proper wealth management industry, so a lot of the competencies which exist in Switzerland can benefit many other countries and propositions.
In addition, there are many global and regional players wanting to grow which operate from Switzerland and that opens up other opportunities. So, our capabilities, knowledge, and excellence clearly benefit the other parts of FNZ globally.
How do you see the competition for talent?
Various tech firms have established their center in Switzerland because there is a very high quality of people here. A lot of talented people want to come and work for us because of our growth, our entrepreneurial culture, and also because we offer many employee benefits.
«It may sound banal, but it brings enormous advantages to the industry»
We are fortunate to find great talent from internal referrals and word of mouth.
Artificial Intelligence has got a lot of attention lately. Will this change your business as well?
We're laser-focused on wealth management and providing advisors the ability to serve investors. We take care of the boring stuff of the business if you want. So, when we talk about AI, the question is, how can it help those wealth managers?
We are using AI in data analytics or, to make back-office processes more automated and efficient. For example, using AI allows advisors to spend less time on administrative activities and therefore they can focus on serving more clients. It may sound very banal, but it brings tremendous upside to the industry.
FNZ is a global wealth management platform. The company works with over 650 of the world's leading financial institutions and counts more than 8,000 wealth management firms among its customers. Well-known names include Zurich, Barclays, Santander, Generali, Aviva, Vanguard, and Abrdn. Worldwide, FNZ employs around 6,000 people in 26 countries, and customer assets of more than $1.5 trillion are managed on the platform. In Switzerland, the company is represented in Zurich, Winterthur Geneva, and Chiasso and has around 200 employees.
FNZ Switzerland CEO Philippe Bongrand already has a long career in the financial world. Before joining FNZ, he advised wealth & asset managers on efficiency, growth, and digital transformation issues at the consulting firm Roland Berger. Before that, he was with Oliver Wyman. He also spent several years at UBS Wealth Management, where he was responsible for Marketing & Client Experience.
