Fintech on Friday: A Swiss private bank in the palm of your hand
Schuyler Weiss, Alpian
Digital private bank Alpian is targeting the mass affluent segment with a client-centric business model
Whereas Swiss private banks typically serve the wealthiest segment, Alpian, a recently licensed digital player, aims to work with mass affluent clients. “We want to deliver a Four Seasons service at competitive fees, in a mobile app, where the client’s financial life fits comfortably in the palm of their hand,” states Schuyler Weiss, Alpian’s CEO for the past two and a half years.
In the same way as the Alps mountain range helped his grandfather, a Swiss pilot, find his way home to Geneva when he got lost 70 years ago, “Alpian wants to help clients find their way to where they want to go,” says Mr Weiss, recalling how he came up with the bank’s name to align with its purpose.
Originally incubated by Swiss private bank Reyl Intesa Sanpaolo, Alpian was then spun off. Today the bank has its own independent management team and governance, employing 45 people at the Geneva headquarters, in addition to offices in London and Rome.
Target audience
The target client segment, Swiss residents with SFr100,000 ($104,000) to SF1m of liquid net worth, represents “a blue ocean space” of roughly 2.6m people, with an estimated combined value of SFr660bn in liquid assets.
Alpian’s offerings include everyday retail banking, such as payment services, debit cards and multi-currency accounts, as well as investment expertise and private banking services, for an “extremely competitive” flat quarterly fee and a 75-basis points investment management fee.
Carefully selected theme-based investment solutions, including exchange traded funds and products (ETFs, ETPs), as well as mutual funds, are utilised in personalised advisory and discretionary mandates, actively managed by the investment team, headed by CIO Victor Cianni, former Citi Private Bank Investment Lab’s Mena and northern Europe head.
Clients have access to advisers within the bank’s “robust and secure” mobile app, via telephone, video calls or chat, and can choose the level and type of impact they want to generate within the portfolio.
Private bankers have been sourced from institutions including Credit Suisse, UBS and Rothschild, mixed with hires from the likes of Google, McKinsey and BCG.
Client experience
“We don't incentivise advisers to get AuM, open new client accounts or sell given products. We incentivise them to give clients a great experience,” says Mr Weiss, a dual US-Swiss citizen, who joined Reyl in 2018 as the group’s first chief digital officer from Morgan Stanley's wealth management unit, having worked as financial services consultant at IBM in New York.
Fund retrocessions are not accepted at Alpian, “as they are not in clients’ best interests”.
There's a trust issue in the market, as most people don't trust their bank is acting in their best interest
The incentive structure remains a key issue in private banking, adds Mr Weiss. “Primarily banks are firm centric, and prioritise things such as profits, AuM and number of clients and not the client's wellbeing and what the client wants.” If incentives push private bankers to open new accounts, it is no surprise that accounts are “created in the name of dead people”.
Having received the Finma banking licence in June, Alpian has launched internally, managing employees’ money, and is set to open to the public in September, when “all fine tuning about the client experience” will be completed. Its objective is to have 5000 clients by the end of 2022. “Our primary focus is to build a successful partnership with each one of our clients, understand their goals and dreams and help achieve them.”
Alpian’s product offering is set to expand, potentially including private equity, hedge funds and real estate in the future. Limited exposure to cryptocurrencies is today offered through ETPs. “If we are to offer direct holdings in crypto, we will do so providing the best advice, otherwise it is gambling.”
Alpian has today two large minority shareholders: Reyl Intesa Sanpaolo - majority-owned by Fideuram Intesa Sanpaolo Private Banking (ISPB) since 2021 - and Fideuram ISPB itself.
More recently, Alpian and Fideuram-ISPB announced a partnership aimed at advancing the digital wealth management offering for the clients of Fideuram ISPB’s Banca Diretta.
Over the next 10 years, private banking will enter a new era, says Mr Weiss. Private banks will need to modernise their systems, as “younger generations will never join a bank that does not offer a great digital experience”, with digitalisation contributing to broaden people’s access to private banking.
“Importantly, we are going to see a mindset shift from a firm-centric model to a client-centric model,” believes Mr Weiss. “There's a trust issue in the market, as most people don't trust their bank is acting in their best interest. That’s what Alpian is looking to change.”
