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«UBS has been partnering with fintech firms through our innovation labs in Zurich, London, Singapore and Weehawken (New Jersey, U.S.),» said Wiwi Gutmannsbauer, APAC chief operating officer for UBS’s wealth unit.

«Partnership between fintechs and banks is a win-win to both parties and allows us to experiment with multiple solutions effectively and efficiently.»

Fintech Partnerships

Banks first began developing fintech partnerships in the mid to late 2010s in anticipation of the growing wave of broader digital adoption.

Credit Suisse, for example, established a partnership in 2018 with data and analytics firm «Canopy» to help generate consolidated portfolio views and relevant insights or analysis.

One year before that, UBS partnered with «FinChat» to develop a secure communications solution with clients via popular platforms like WhatsApp or WeChat – a project that saw the number of messages double during the first half of 2020 during the pandemic.

BigTech: No Threat?

Capgemini’s wealth report reflected similar sentiments about fintech competition with the challenge of tech giants cited as one of the two smallest worries (26 percent) with regards to industry disruption. This is despite the same report detailing the perceived superior performance of tech firms by HNWIs, relative to banks, across multiple facets including access to portfolio information or delivery of value-added services.

Still, there are other areas that tech firms do not or cannot excel in such as large balance sheets, effective regulatory frameworks or financial expertise.

Chinese tech giant Ant Financial, for example, recently established an investment advisory joint venture with Vanguard to leverage its investment management capabilities.

Human Element
But perhaps the most valuable and oft-cited component in finance that can outdo tech is the human touch and nowhere within the industry is this more true than in private banking. Case in point: can a robot (for now) effectively navigate through sensitive issues influenced by abstract factors such as love and hate, in the finances of a mistress, or pride and fear, in the dealings of death and inheritance?

«Certain technological solutions can replace humans but only in very special niches – this is where highly specialized fintechs can be successful on a standalone basis,» added UBS's Gutmannsbauer. «[But] when you provide holistic, live cycle and even generation-spanning advisory solutions to clients, software cannot replace human empathy and touch.»

«[W]hatever we did in the last few months will [not] replace face-to-face communications,» said Omar Shokur, Asia CEO of Indosuez Wealth Management, in a separate interview with finews.asia last month. «Building trust and relationships with clients continues to be the core of this business. And you need to see clients and meet them many times to be successful.»