Is Canopy Credit Suisse's Secret Weapon?

Is Credit Suisse's Canopy tie-up a major advantage for the Swiss bank over rival wealth managers, or is the fintech deal more hype than substance? finews.asia investigates.

By Shruti Advani, Guest Contributor finews.asia

The terms «revenue boost» and «strategic advantage» are so overused by private banks that industry observers like me tend to bleep them out from otherwise interesting CEO conversations. Indeed, over the last five years, private banks in Asia have spent millions trying to get an edge over competitors – most often by acquiring businesses or hiring mega-bankers.

Where banks have attempted to leverage technology, strategies have focused on enhancing client interfaces or using artificial intelligence to lower costs. Know that I am a sceptic then when I say that Credit Suisse’s partnering with Canopy to offer clients a portfolio view on assets, could be a game changer for the bank - in the short run.

The average client in the region uses between 4 and 5 private banks, increasingly onerous account opening has capped this number on the upside. A client using Canopy is able to get a portfolio view on all assets, from equities and bonds to vintage cars and jewelry, across all private banks. A Credit Suisse relationship manager, when authorised by the client, has access to this aggregated view of a client’s investments as they rise and fall.

«Data is advancing to weapons»

Thus, this relationship manager is able to track what a client buys when markets rise, how he reacts when markets fall, what his asset allocation strategy is and whether he is biased towards any one particular asset class. With a few clicks, the relationship manager is able to see at what price competing banks are selling both flow and non-flow products to the client and benchmark Credit Suisse products against them on the basis of not just price but also performance.

What's more, at present, the Credit Suisse relationship manager is the only one amongst his peers to be able to do so. It is, what Tanmai Sharma, founder and chief executive of Canopy, calls «the weaponization of data.»

The reaction of a banker at longtime rival UBS is very telling: «It is a powerful advantage, and we are certainly watching closely.» Switzerland's largest bank would seem to have been an equally natural fit for Canopy. And indeed, «We had considered a similar route ourselves but unfortunately those talks did not fructify», the banker said.