Lugano Banking Day, 20 March 2018: Opportunities for the Swiss and Ticino financial sector in the era of FinTech - Banking blog

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We were delighted to take part in the inaugural Lugano Banking Day, which attracted over 700 participants from the Ticino banking sector – the third largest financial centre in Switzerland. In a day full of interesting discussions on trends in the financial technology industry, we were glad to share ideas about the future role of traditional financial services in the era of digital transformation.

Radical technological innovations in the financial services industry are pushing the banking sector to reconsider existing business models and operations. However, over the last ten years, Swiss banks have already demonstrated an impressive capacity to adapt their way of conducting business in order to mitigate the effects of the global financial crisis, and regulatory changes in the area of tax reporting. Accordingly, the speakers at the Lugano Banking Day 2018 expressed confidence and optimism, and the disruptive nature of FinTech was perceived as much more of an opportunity than a threat for the financial sector in Ticino and the rest of Switzerland.

The closing panel included participants of international relevance; Sergio Ermotti, CEO of UBS; Philipp Hildebrand, Vice-Chairman of BlackRock and former Chairman of the Swiss National Bank; Alexander Lipton, MIT Connection Science, CEO at StrongHold Labs, Visiting Professor of Financial Engineering at SFI@EPFL; and Bob Contri, Global Financial Services Leader at Deloitte. The event is the result of a successful collaboration between the Associazione Bancaria Ticinese (Ticino Banking Association), the Ticino Department of Finance and Economy (Dipartimento Finanze ed Economia, Repubblica e Cantone Ticino), the City of Lugano (Città di Lugano) and the University of Lugano (USI Università della Svizzera Italiana). Over the coming years, the conference aims to become a strategic event for Ticino, and the first installment certainly showed its potential to do so.

Key topics discussed during the workshops included:

  • the impact of blockchain and cryptocurrency technologies on the financial services industry;
  • the use of artificial intelligence and data analytics to enhance customer services and the effectiveness of compliance operations;
  • the use of robotics to reduce operating costs; and
  • the collaboration between traditional banks and FinTech start-ups to leverage on FinTech’s creativity and agile business models to accelerate innovation in the financial sector.

Remarkably, the general perception is that the advent of new technologies and new players in the financial sector will represent a great opportunity to transform existing business processes, and enhance the quality of customer services, to generate a sustainable growth for banks in an environment of increasing regulatory costs and shrinking margins.

As indicated by Deloitte’s Bob Contri, FinTechs should not be considered as a disruptive threat. Most FinTechs focus on specific business problems; when considering how to fundamentally transform the banking sector by leveraging FinTechs, large organisations could act as architects, bringing together different technological solutions and considering individual FinTechs as strategic building blocks of their own digital transformation.

The collaboration with innovative start-ups and the world of academic research was also highlighted as being of vital importance by Sergio Ermotti. In this context, UBS had recently announced a collaboration with the IDSIA (Istituto Dalle Molle di Studi sull'Intelligenza Artificiale), a research institute for artificial intelligence based in Manno, Ticino, to create a centre of excellence for artificial intelligence, analytics and innovation. This is great news for the Ticino financial sector.

The final considerations of the high-ranking panel speakers indicated that there is a shared awareness that Switzerland has the capacity and competencies to play a leading role in the digital transformation of the financial services industry and the innovation of the banking sector. The mastering of new technologies will create enormous opportunities for Swiss banks, as suggested by Philipp Hildebrand, who sees Switzerland as one of the best places in the world for FinTech start-ups. However, he also warned the audience that companies issuing cryptocurrencies with low compliance standards could over time cause a new reputational risk for the Swiss financial centre.

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Leonardo Brizi - Manager, Forensic, Lugano

Leonardo is a Manager in the Deloitte Analytic and Forensic Technology unit. He holds a PhD in Physics from the Swiss Federal Institute of Technology in Lausanne. At Deloitte, Leonardo focuses on data analytics and eDiscovery services for large scale AML and KYC investigations and cross-border tax issues.

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Rwyss

Ralph Wyss - Partner, Forensic, Zurich

Ralph is a Swiss attorney at law and PhD (law) with more than 20 years of professional experience in the Swiss financial services industry. He is a well-known AML and compliance expert in the Swiss marketplace.

At Deloitte, he works in our Forensic practice. He is the AML topic leader in Switzerland and a member of the financial services industry leadership team. Ralph is the co-author of the Deloitte point of view “Compliance 2025: DNA evolution in the Financial Services Industry”.

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Andreas Timpert

Andreas Timpert - Partner, Financial Services, Zurich

Andreas is a Financial Services partner with more than 20 years of Consulting experience focusing on defining and implementing Operating models in front-, middle- or back-office functions. Typical drivers for change include regulatory changes, cost optimization or technology-driven transformations.

Andreas also leads Deloitte’s Rethinking Compliance initiative and is the co-author of the Deloitte point of view “Compliance 2025: DNA evolution in the Financial Services Industry”.

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