Urs Rohner on the Digital Future of the Bank
For the Chairman of the Board of Credit Suisse digital banking is inevitable: "Digitalization broadens the scope, heightens the speed and adds to the catalog of our products and services."
Urs Schwarz: You encouraged the development of Credit Suisse's digital Private Banking capabilities. How is this strategically important for Credit Suisse?
Urs Rohner: Within just a few years, innovative technologies have brought lasting change to business models in the finance industry. I have been following digitalization closely since 2011 and addressed the topic at strategic level with the Board of Directors. Even back then, some of our competitors were increasingly active in this field. This made it all the more important for us to strategically tackle digital innovation and build the necessary resources. In 2013, "FutureLab," the in-house think tank I launched shortly after my election, became Digital Private Banking (DPB), an independent department of Private Banking & Wealth Management. Now numbering several hundred employees worldwide, it has developed impressive initiatives and consolidated our digital expertise. The competence built and developed in the DPB organization broadens our strategic options and has contributed significantly to our ability to expand our market presence, especially in growth regions. From a branding perspective as well, it is important for innovation to remain one of our hallmarks.
How does DPB affect the bank's business model?
Digitalization broadens the scope, heightens the speed and adds to the catalog of our products and services. With the solutions afforded by DPB, we can make our business more cost-effective and provide our clients with user-friendly, mobile banking options that were previously not available. For example, we can process complex amounts of data to support investment decisions. At the same time, we are in a position to offer our clients direct access to comprehensive portfolio analyses and risk tests, personalized investment recommendations, intelligent trend evaluations, and private investment clubs. Of course, technology-bound solutions require outlays that have a short-term effect on the cost structure. In the medium to long term, however, we see cost advantages. For example, digitalization can make the process of satisfying regulatory requirements more efficient. Basically, DPB is both a requirement and a means of staying competitive for the long term.
More and more industry outsiders are breaking into the finance sector. What qualities are needed to survive and thrive in the midst of this new competition?
Stability, security and advisory expertise remain the cornerstones of a long-term bank-client relationship. For startups, these pose a challenge. However, our clients likewise have new expectations, especially with regard to flexibility, innovation and the availability of services – and these are among a startup's strengths. But fintech startups do not necessarily want to become direct competitors to established institutions. Instead, they often create entirely new segments with little strategic relevance for the established banks: I'm thinking, for example, of micro-loans or cashless payment instruments. That said, there are technology companies such as Google and Facebook that have acquired a banking license. Although at this point they are primarily targeting payment transactions, we must not underestimate their reach in the long term.
How will increasing digitalization continue to change the finance industry?
I assume that the global fintech market will be more clearly defined in the future. It's true that more than three billion francs were invested in fintech innovation in 2014, but only a few of the trends identifiable today will solidify. Transparency and client orientation have become enormously important because of digitalization, and they will remain essential. Furthermore, having gained these new innovation capabilities, the finance industry might well surprise us with many creative solutions. The success stories aren't written on the outskirts of the industry, but by established institutions that will engage deeply with innovators as well as with established technology companies.
How do you take advantage of what digital banking can do?
Online payments or trading have become a matter of course for me. In addition, I follow market developments daily, mostly on my iPad while on the road. As a Credit Suisse client, I have access to very good digital solutions – whether it be for portfolio management or investment decisions. In addition, I'm routinely on hand when new DPB functionalities are tested, which is always a thrill and leaves me eager for more.