Andre Lagger: «We Don’t Need a Revolution»

Is the world of banking set to change completely? Here is how Andre Lagger, CEO LGT Financial Services, sees the digital revolution.

Andre Lagger, what exactly does digitalization mean for LGT?

Everyone has a different understanding of what digitalization means and there is a lot of hype surrounding the matter. That being said, being digital is a success factor. I see three important areas here for LGT.

Firstly, the interface between the client and LGT. How straightforward is this process, how user-friendly are our services and how positive is the client experience? The second point is new service offerings, including the application of solutions provided by fintech companies, which we want to integrate into our value chain in a judicious manner. The third aspect is efficiency gains through the automation and/or the simplification of processes.

That doesn’t sound particularly revolutionary…

We don’t need a revolution, we need evolution – or in other words: continuous further development. Our existing IT infrastructure offers a lot of possibilities for further development. In the future, it will continue to be a key pillar of our business and it is also the foundation for the development of new digital projects.

«We are now increasingly focusing on front office-oriented processes»

Fintech solutions do not work in isolation, but in synergy with the IT systems we use. This requires good integration and explicitly harmonized processes. Digitalization also involves aspects such as automation and efficiency, which have always been key areas of focus for us. LGT has achieved a very high level of automation in the back office in particular, also in comparison to the competition. We are now increasingly focusing on front office-oriented processes.

The IT tools used to date combined with fintech solutions offer many opportunities such as increasing automation, improved business support, new service offerings as well as means for communication with our end clients.

Can you use a concrete application as an example to illustrate this?

The textbook example is our new, digitally-supported advisory process, which very significantly reduces the workload for our relationship managers when it comes to adhering to regulatory requirements. The end product looks simple to users. Relationship mangers have a new user interface at their disposal.

«A robo-advisor is a software that constructs, manages and monitors portfolios»

Once a profile has been established for the client, the remainder of the advisory process leading up to the initiation of a transaction is for the most part automated. Behind this user interface is an interplay between a number of software components that are not visible to the user.

These conduct automated compliance checks, generate investment proposals, retrieve product information from third-parties and determine which channel will be used to send an investment proposal. As a whole, we are talking about a combination of elements from the existing IT infrastructure with elements from the world of fintech.

Robo-advisors, which represent fully-automated wealth management, are almost always mentioned in connection with the digitalization of banks. Will LGT be introducing this technology?

Simply put, a robo-advisor is a software that constructs, manages and monitors portfolios. End clients can place orders themselves on the internet, as a rule, however, they can only construct portfolios consisting of straightforward financial instruments. Contrary to what the name would suggest, the robo-advisor is not an advisor.

«Artificial intelligence and cognitive computing are two areas that I find very exciting»

Our philosophy is: technology should support the advisor, but it is the advisor who interacts with clients and discusses the investment proposals with them.

We are well-equipped in this area from a technological standpoint. There are two phenomena that are particularly interesting in this context: firstly, robo-advisors have to date not achieved a true breakthrough in Europe. And secondly, the big robo-advisor companies in the U.S. are increasingly turning to humans as the link between the technology and the client.

So in your view, what are the most exciting digital trends and future technologies for LGT?