David Durlacher, Chief Executive Officer, Julius Baer International
As a leading entrepreneurial and innovative private bank, how is Julius Baer embracing the WealthTech revolution?
There is no doubt in my mind that technology plays a critical role in Julius Baer’s future. We have been investing significant amount over many years to improve our capabilities from e-banking to augmenting the advisory process. We strongly believe that human relationships must remain at the core of our business – our clients have made it clear to us that they value the relationship they have with a human being rather than a fully algorithmic alternative. However, the complexity of advising and processing investment transactions has increased so much that it is almost impossible for a relationship manager to think of everything without digital support. For example, today, we have sophisticated solutions that check portfolios to ensure that they are still in line with our client’s requirements and whether there is a strong investment opportunity to be had. This helps us spend less time on analytics and administration and more time with our clients.
“We strongly believe that human relationships must remain at the core of our business.”
Clients are changing and so are their expectations. How can wealth managers keep up and what can be done to stay ahead of the competition?
Changing client expectations has meant that the financial services industry as a whole has had to fundamentally rethink much of its business model, and most notably in terms of digital services. Wealth managers are not immune from technological disruption and need to respond to greater client expectations, a more challenging regulatory environment and a need to respond more quickly with improved accuracy. Taking advantage of the innovative strength of the technology industry is key. At Julius Baer we are doing this through a colloration with F10, a Swiss FinTech Accelerator & Incubator – a partnership that has been in place in since 2016. This allows us to keep close to changing trends but also to identify where we can benefit from support with specific challenges we face.
“Wealth managers are not immune from technological disruption…”
Google play, Apple pay, Facebook’s Libra, the ambition for BigTechs to tap into consumer’s finances has become crystal clear over recent years. In the face of these developments, how realistic would it be for any of these corporations to gain a foothold into wealth management?
There is of course, always a chance that some of the huge global digital players will disrupt the wealth management industry. We are seeing it more broadly in the payment sector and I expect that retail banking will continue to be disrupted by these players as well as by the challenger firms who are emerging as serious contenders. Just looking at Starling, Revolut and Monzo and the impact they are having. Within wealth management, I believe that it is more likely that the strong, global brands such as Julius Baer will continue to prosper as long as we continue to focus on hiring, developing and retaining quality people, building trust and personal relationships with our clients.
We have seen technology ‘disruptors’ enter the wealth management sector with an ethos of removing the need for human ‘active’ management. The reality though is that many of these players have had to hire advisers to complement their digital offering and meet demand from their clients. Ultimately, the extensive experience and high security standards of traditional wealth managers, and this a basis of trust, are likely to remain key attributes that play an important role in their future.
David is Chief Executive of Julius Baer International Limited in London, responsible for Julius Baer’s business in the UK and Republic of Ireland. He is a director of the board of Julius Baer International Limited.
David will be speaking at Investment Innovators: Wealth Summit taking place at Hilton Tower Bridge, London on 12 March 2020.