Urs Palmieri, a banking specialist working for EY, wants to export the Asian tech knowhow to Switzerland. He detects a certain lack of innovation and courage to take calculated risks in the country.

Urs Palmieri, at the beginning of the year, you returned to Switzerland after seven years working in Singapore. You act as an adviser to financial service sector companies. What are your first impressions back home?

Switzerland has been through some 120 years of industrialization and is a world leader in many industries. But, there's cause for concern if you look at innovation in the financial services industry.

Why is that?

If I compare with Asian markets, at first sight, there's a lack of dynamic and a lack of will to overtake the global competition. I also noted that there are few investments in new ideas and I also see a lack of readiness to cooperate and form alliances. It doesn't bode well.

You exaggerate. In what way is Asia better to such an extent?

You have to consider the historic dimension: in Asia, there are many regions, where millions still went fishing in wooden boats some 10 or 20 years ago.

«Hence their will to create wealth sustainably»

Globalization and technological progress have thrown these people into a totally new world from one day to the next. And thus they jumped several economic and technological steps of development.

And what do you mean exactly by that?

Here's an example: first, people had no phone at all and now they have mobile devices with internet access. It gives them a range of totally new opportunities. And that's why they are so curious and have such a strong will to develop further and to create wealth for themselves in a sustainable way. And that is also why the speed is so immense in Asia.

«I see that many financial firms don't mention innovation as such as a corporate goal»

In countries such as Indonesia, the Philippines or Vietnam, people are doing whatever it takes to become middle-class. That's why there is so much energy, and it also shows in banking. It forces financial institutes to be agile and innovative. That's the only way to satisfy the demands of their customers.

Do you think Swiss banks aren't innovative?

The business approach in Switzerland is based on traditional values such as stability, reliability and excellence. The financial market did well enough in the financial crisis with this approach. And the values remain important.

But the enterprising spirit, courage to take calculated risks and power of innovation have been left behind – but in today's world, this is what we need!

Easier said than done. Could you explain in more detail?

Of course. I see that many financial firms don't mention innovation as such as a corporate goal, in their score card. In other words: either they are negligent or they haven't understood how existential transformation and digital disruption has become.

«Revolut is faster, more customer-friendly and much cheaper than classic banks»

Companies from outside the industry are paving the way, as demonstrated by the example of Revolut. The British online firm, which provides payment services in the wider sense, is faster, more customer friendly and much cheaper than classic banks.

Why are established banks relinquishing more and more business areas to fintechs?

There are several factors at work here: bigger financial services companies have become so complex that they take much longer to implement innovation.

They also frequently suffer legacy problems with IT, liabilities that they procrastinate on. Frequently, the culture isn't such that they could easily handle the constant change. Hence, they watch the fintechs and hope to buy the best of those at an earlier or later stage. It is also possible that they are unable to design a business case because they are being judged on how they manage in the short term.

«You don't need much imagination to see Google and others thrive in financial services»

We shouldn't be surprised if banks suffer the same fate as Nokia or Kodak in the medium- to long-term. They dropped out very suddenly because they didn't see the signs of the times early enough. There are a lot of indications that banks – much like telcos – one day will only provide infrastructure and distribution, while specialized companies such as Revolut or tech giants including Google, Netflix and Facebook will do the business.

You don't need a great deal of imagination to see Google, Alibaba or Facebook active in financial services: the entry hurdles may still be quite high. But as soon as the regulatory complexity has been broken down, the scenario isn't far off anymore.

Back to your work for EY and experience from Asia. What are your next steps in Switzerland?

I would like to spread the Asian technological knowhow in Switzerland and get the various providers to get better linked up with the wealth management ecosystem. One example of such a provider is Canopy from Singapore, which recently opened a branch in Zug.

It is interesting to see that the firm, which is active in the processing of financial data for banks and their customers, hasn't expanded to Hong Kong, which would have been the logical step, but to Switzerland.

Why is that?

Because Switzerland remains one of the most important wealth management markets in the world. That's why Canopy primarily wanted to get a foot into the door in Switzerland.

And what is the company about?

Canopy extracts client data from a wide range of banking documents, aggregates the information extracted and visualizes them. This helps improve the reporting substantially as soon as a client has more than one banking relations. It also enables a better analysis, for instance in legitimate taxation matters.

«There's a big need to catch up»

It is ironic that such a service was first introduced in a young wealth management market such as Asia and now reaches Switzerland. The need to catch up is fairly big and the quicker the banks understand, the earlier they will be able to face the digital revolution. And that is only one example of many.

Urs Palmieri, 40, is an associate partner at EY Switzerland. He advises banks and other financial service companies on digitization and efficiency as well as growth strategies. Before joining EY in 2016, he worked at Credit Suisse for seven years. He received mandates from the chairman’s office of Urs Rohner, and successfully implemented digital projects. At EY, he worked in Singapore in «Wealth & Asset Management Asean» and advised banks in Asia.