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The pandemic has strengthened our conviction that technology is key
Interview published in Le Temps, 16 juin 2020
Lombard Odier has made technology one of the pillars of its business. Not only has the Geneva private bank invested in technology tools like the majority of its peers, but back in 2013 it decided to become a service provider for other institutions by making its in-house banking platform available to them. The pandemic has confirmed the value of this strategy and shown that running a complex institution demands a reliable tool. We met up with Alexandre Zeller, Managing Partner in charge of innovation and new technologies at the Lombard Odier Group, a role that is tailor-made for someone whose career has taken them through a major bank (Credit Suisse), a regional bank (BCV) and SIX, the company that runs Switzerland’s stock exchange and payment systems.
Why did Lombard Odier suddenly decide to become a digital services provider to other institutions?
The Group has three pillars: wealth management, asset management and banking technology. More than 50 years ago, we were one of the first, as I understand, to install an IBM mainframe in a Swiss bank, which was a revolution at the time. In the 1990s, we evolved towards a more modular system, an approach that makes it possible to have a service-oriented architecture. In 2013, we decided to share the cost burden so we could develop a state-of-the-art wealth management platform. Then we searched for clients, specifically banks with a profile similar to ours.
Was this approach successful?
Yes. We now have ten clients. In 2018, after the Syz integration and in line with our motto "Rethink Everything", we conducted an in-depth study of the trends and challenges in banking technology. There were two routes we could have taken: continue to develop our platform or return to a traditional approach. As our product is appreciated ("made by entrepreneurs for entrepreneurs") and is deployed in a market where there are few suppliers, we came to the conclusion that we have an advantage in the sector. External asset managers are good points of reference because they work with multiple systems. They often say ours is the most powerful and the most focused on private banking, but you have to keep evolving, especially with the user interface, which is getting a little long in the tooth. Intended to last seven years, the future development of our GX platform is based on three dimensions: renewing the technology layer, rethinking and digitalising our processes, and improving the client experience.
Does this decision mean you are committed to the long term?
Absolutely. It's a substantial investment – the second-biggest after the construction of our new building in Bellevue. It's also a commitment that allows us to retain expertise in French-speaking Switzerland and to sustain the capacity of the local universities. We look forward to bringing together fresh engineering graduates and experienced asset management professionals in the future. These are unique pairings that make it possible for us to combine technological innovation with banking expertise. We employ 660 staff in this area of the business, including 130 in Luxembourg.
How do you attract young people?
When it comes to recruitment, we are competing with both the technology giants and start-ups. The new paradigms for technology in the banking industry mean the stakes are high. Our investment in Taurus, one of the Swiss leaders in fintech, is also part of our strategic approach to remain at the forefront of advanced technology in blockchain and digital assets. This gives us an insight into the cryptocurrency markets, even if our clients are not showing much interest yet and there are serious regulatory obstacles. Maybe we will be custodians for tokenised assets in the future, and we are working on new asset classes. We have a two-fold objective: to be ready when the market is ripe and to constantly enrich our client offering.
How do you intend to develop digital services for clients?
Aside from Lombard Odier we have ten clients on our platform, with assets under custody of CHF 67 billion. We hope to attract one or two new clients each year, starting from 2021 at the earliest. The more closely aligned they are with our philosophy, the more we can avoid non-standard developments. We will focus on institutions in Switzerland and Europe that have a similar business model to ours and operate in the same jurisdictions as we do. The new GX platform is essentially financed by our Group, but our external clients will also profit from it.
Is it exciting to be doing this in a bank?
Ten years ago I would have said no. But nowadays, banking technology has become so crucial that it represents a genuine competitive advantage. The pandemic has only strengthened our conviction. If you pick an off-the-shelf software package you write a large cheque to someone and go into a long tunnel of migration – and the light at the end can take a long time to appear. Here we are attracting young people, developing an in-house product and improving it to meet our own needs and those of our clients. It's exciting. The lockdown forced us to review all our priorities in the space of a few weeks. We were able very quickly to introduce new functionalities for our clients as well as develop a tool that can handle video conferences for up to 3,000 people. We are putting agility into action every day. We also continued hiring over this period.
How did your system cope during the hectic weeks of lockdown?
In March the volume of transactions tripled, and in April it was up 50% on our normal traffic. Requests for client connections also tripled, and all this while our teams were in lockdown; they adapted remarkably to the needs of this exceptional period. Projects were major challenges, because they involve coming together in a way that was difficult during this period. 85% of our employees said they enjoyed working from home. We put on daily yoga and meditation classes, and every Friday the Partners provided updates on the business and took questions from staff. That's something we don't even do in "real life"! Video conferencing makes sense, but bilateral contact is still crucial.
Does this experience put the construction of your new headquarters in doubt?
No. Right from the outset we opted for dedicated work stations rather than hot desking. Now we are turning our attention to the equipment and data that staff have to have, where they need it and when. Mobile working tools are nothing new and we knew we would have to create collaborative working spaces, but the crisis has added a further dimension: working from home. The future head office has been designed to handle the organic growth of the Group. We will not have everyone teleworking – we already used to allow one day a week, on certain conditions – but it is part of our considerations. Private banking remains a service activity based on trust and advice, for which human contact is essential.
Important information
This is a marketing communication issued by Bank Lombard Odier & Co Ltd (hereinafter “Lombard Odier”).
It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a marketing communication.
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