Switzerland knows how to do banking, but the jury is still out on digital finance. This year should see the arrival of a new digital private bank, called Alpian, which has secured further backing.This content was published on April 8, 2021 - 08:30
Alpian has just raised CHF17 million from investors, on top of a CHF12 million haul last year. It aims to bridge the gap between plush wealth managers and a digital robo-advisors. It hopes to get a banking license this year, targeting clients with savings of between CHF100,000 and CHF1 million (known as the “mass affluent”).
Alpian was incubated by the Swiss private bank Reyl, with whom it will cooperate once it launches as an independent entity. The Italian banking giant Intesa Sanpaolo, which took over Reyl last year, will have an “indirect stake” in Alpian.
“Most digital banks are not focused on what Swiss private banks are good at, which is the understanding and growth of wealth,” Alpian CEO Schuyler Weiss tells me. “The mass affluent clientele wants this growth in wealth, but they don’t have access to it. With technology we can democratise access to private banking services to a broader segment of the population.”
How does it plan to do that? It will offer a three-tier service model. This starts with execution only accounts where clients manage their own funds themselves, advisory services and fully managed (discretionary) accounts, which draw on the expertise of Reyl bankers to allocate funds. The latter account will require clients to deposit of at least CHF30,000.
“Our fees will be drastically lower than private banks - there’s no comparison,” says Weiss, who won’t be drawn into specific details. “For the services that we will provide, our fees will be about equivalent to what most people pay at their retail bank.”
On top of that will be a Revolut-style credit card that offers zero fees on international transactions in Swiss francs, US dollars, euros and British pounds.
So how successful might Alpian be? The company has decided to focus purely on the Swiss market to start with.
Last year, the Lucerne University of Applied Sciences and Arts (HSLU) took a deep diveExternal link into the Swiss digital investing scene. It concluded that the market has potential, but found the volume of assets under digital management “rather disappointing”. Some 1,217 people were asked about their investing habits and less than 10% said they had tried digital services.
“The Swiss invest more time in choosing a new car than financial products,” HSLU professor of banking Andreas Dietrich complained to the Neue Zürcher ZeizungExternal link newspaper.
That’s a bit of a problem for Swiss fintechs, including neo banks, robo-advisors and even crypto banks that try to sign up the general public. On top of a rather lazy attitude to understanding finance or technology on the part of Swiss citizens, their trust in fancy new digital platforms also appears to be lacking.
“The entry of established banks into this segment will undoubtedly be an important step in enabling this market to further develop,” the HSLU report reads.
Some of the newer digital finance brands on the scene might dispute that, but time will tell.
“The competition is really for people’s trust,” says Weiss.