Seeing the challenges of digitization as an opportunity

Insights 11/28/2019
Reading time: 3 minute(s)

The introduction of the EU regulatory regime MiFID II sets the Wealth Management of many banks before a new challenge. At an event organized by the HSG Master in Banking & Finance Alumni Club on November 26, Vontobel demonstrated how to make a virtue out of this necessity and why a new team organization is needed in today's fast-paced world.

"In the past, banks often had better technology than their clients," said Dr. Zeno Staub, Vontobel CEO and HSG alumnus, speaking on the consequences of digitization. "But today, this is not necessarily true any more." Many clients now use the technologies of tech giants such as Google, he said.

Meeting in the auditorium of Vontobel headquarters, the evening’s speakers were all in agreement that digitization offers great opportunities. The instruments used by tech companies to develop their applications can also produce convincing results for a private bank.

Challenges thanks to MiFID II

With the introduction of MiFID II, the processes involved in looking after client needs became significantly more complex, as Christian Gmünder, COO Wealth Management summarized the situation. For example, a transaction that used to take 10 seconds now took 10 minutes, and systems became more vulnerable to user errors.

Christian Gmünder, COO Vontobel Wealth Management (Credits: University of St. Gallen)

That is why, after ensuring that a process in line with the new regulations had been successfully introduced, Vontobel Wealth Management then turned to optimizing the entire investment advisory process in order to provide the bank’s clients with even better service than before. Vontobel is not new to optimization-related undertakings like this. However, what turned the traditional way of working on its head was the very ambitious timetable: in just six months, the new investment advisory solution had to be ready for implementation – and in addition, three months later a digital portfolio management tool had to be ready for clients as well, and not long after that a purely digital onboarding process had to be developed, too. If the bank tackled these tasks the way it previously approached such missions, it would have been impossible to meet the goals – if only because of the need to hire additional staff. The answer to the challenge was the Vontobel WM Digital Hub.

Product development by interdisciplinary teams

In the Digital Hub, teams work on the principle of agility – something tech companies have been familiar with for a long time. How Vontobel takes advantage of this approach was presented by Christian Hauser, Head Business Engineering & Digitization. The agile teams are made up of representatives from different departments, from relationship managers to software developers to sales specialists. In such a team, employees no longer work in their traditional line organization, but in a mixed team that focuses solely on value to the client, across all organizational units. This interdisciplinary team doesn’t stay together only temporarily, in a project context, but permanently, i.e. until the end of the product life cycle – and it also operates the product.

The prerequisite for this is that management must give the team a lot of freedom. Trust and communication replace the old control structures. Employees are given the full context, and they take direct contact with clients and relationship managers. They identify more with the goals this way, and their motivation increases enormously. Leadership in such a construct does not become irrelevant, but rather it changes its focus from following narrow guidelines and controls to setting bigger-picture goals, removing obstacles and coaching the team, as Christian Hauser emphasized.

Members of the audience then had a chance to take a closer look at the applications developed by the teams of the Digital Hub so far. At a number of stands set up around the room, development team representatives presented their applications: Wealth Management Workplace, the  MARS Advisory and Risk Solution, the Risk Engine, Digital Onboarding, mobile banking, and Vontobel Volt®.