Zuercher Kantonalbank is set to unveil a new advisory concept, private banking head Christoph Weber, tells finews.ch in an interview. He also talks about where he see's tomorrow's billions flowing and what African campfires have taught him in his job.
Mr. Weber, if you had to choose a financial firm to manage your money, which one would it be – outside of ZKB?
I’d rather describe my ideal bank than name specific names. I would want a modern bank that is open to technology and can offer the whole array of services, with client advisors who understand the individual needs of clients. It would have to be a bank of a certain size to do that, but not a big bank. Also, my money would have to be invested securely.
You’ve described ZKB quite precisely. Do you manage your own money or does the bank do it for you?
I have a mandate at ZKB, which I think is important to see how the bank’s investment committee works. You have to let go of your personal investment preferences. In parallel, I manage a small portfolio where I make my own investment decisions. The sum is a good comparison of both worlds.
«Not My Natural Habitat»
Which is better, yours or ZKB’s?
I’ve had the portfolio of my own investment decisions for longer than I have had the ZKB mandate. If I factor in risk as well, then I’ve done better with my own mandate so far.
Does that mean you’re a gambler then?
No, absolutely not – that’s not my natural habitat. I follow a buy-and-hold strategy.
The private banking market has become very competitive. How do you think ZKB can grow?
Primarily organically. Of course we regularly look at acquisition opportunities, but they would have to fit with ZKB. We’re showing double-digit growth in our key client unit, which is major clients with at least 5 million Swiss francs in assets. Clients are willing to pay a price for professional and skilled advice. For complex offerings like these, ZKB is the only bank which can offer this, besides the two major banks.
«We Expect Inflows Of Roughly 1 Billion Francs»
In the segment of 100,000 francs and up, we expect massive pensions to be paid out. Generations which are financially provided for are nearing retirement. We expect pension fund inflows in this segment, which we call affluent private clients, of nearly 1 billion francs per year. These clients are largely already with us, and we benefit from that.
What’s your expectation for business with foreign clients?
We’re growing over proportionally in our foreign business. We see particular dynamic growth in Germany, after clearing out in Germany. We manage roughly 6 billion francs in international private banking. Our goal is to hit the 10 billion franc mark in two to three years. In total, we manage about 70 billion francs in private banking across all segments.
Is ZKB benefiting at all from the current uncertainty surrounding Credit Suisse?
Clients don’t like uncertainty linked to their «house bank», so as one of the most secure banks worldwide, we’re attractive to clients. To be sure, a strong Swiss financial center is made up of strong banks.
«Not Lost a Single Franc»
With all due respect, ZKB was a major beneficiary of asset outflows elsewhere in the 2008-09 financial crisis.
That’s true. The bank took in roughly 50 billion francs. I had just joined ZKB and we were articulating our goal to not lose a single franc through outflows. Contrary to predictions made by our competitors, we managed to keep those funds with ZKB.
Seen from that angle, another financial crisis would help ZKB.
We don’t wish for another financial crisis. Nobody knows how these crises end. We took the opportunity back in 2008.
How do you respond to critics who say that effectively being guaranteed by the state gives you an unfair competitive advantage?
We’re one of the safest banks in the world even without a state guarantee. This is confirmed by our aa- standalone rating from Standard & Poor’s. We also cover the cost of the state guarantee – at a cost of roughly 21 million, last year.
«Lots of Interpretations for Robo-Advisers»
What are the next milestones for assets under management and net new money?
The media always focuses on these two metrics, but they are of subordinated interest to me. Assets and management and net new money have nothing to do with competitiveness or how much value we add for our clients. Revenue growth is far more important.
One way to incentivize clients to invest is to fully automate advice with robo-advisers.
Robo-advisers has become a term which encapsulates just about everything, from a standardized process in online banking to artificial intelligence (AI). What we often forget is that even the most tech-savvy client is going to want to talk to an adviser made of flesh and blood at certain key points in his or her life. And as long as they do, we are sticking with our multi-channel strategy of branches and personalized service, which we are investing substantially in.
What innovations can we expect in private banking?
We’re working on a new advisory model for client mandates that isn't an automated rebalancing like we have seen until now, but a flexible one. This enables us to rethink and potentially adjust portfolio structures during extraordinary market events like the Swiss National Bank’s release of the franc against the euro last January 15th.
«Tablets in Testing»
ZKB intervenes automatically in cases like these. This risk-based approach is new in asset management mandates for private clients. We’re implement this change in the next year.
On digitization: many banks have begun giving their relationship managers tablets to take along when they visit clients. ZKB too?
Our tablets are in testing and will be delivered in the next year. Experience-based advisory can only work with flawless tools and relationship managers who have been trained well, otherwise you can’t fully exploit the potential of a tablet in the advisory process.
We’re also harmonizing the user interface of our online and mobile banking for clients with that of our relationship managers. This simplifies adviser-client communication.
You’ve been with ZKB since 2008 and are deputy CEO. Are you interested in the CEO job?
I feel totally comfortable in my job as head of private banking. To be able to run a business like this is a dream job for me, so the CEO question doesn't really come up for me.
«Jacques Cousteau Was My Idol»
You did a bank apprenticeship and have bene in finance ever since. Did you ever have any other plans?
Yes, I did – I wanted to study zoology when I was younger. Marine explorer Jacques Cousteau and zoologist Berhard Grzimek were my idols. I saw myself as an animal watcher in Africa. I nevertheless decided to pursue an apprenticeship in banking because zoology was seen as an unprofitable pursuit. Early on, I realized that banking is very multifaceted and dynamic, and promises an exciting future. In the meantime, I’ve been able to fulfill my boyhood dream too.
How so?
Together with my wife, I run an association called Friends of African Wildlife for animal conservation in southern Africa. We contribute financing for an education facility for rangers near Kruger National Park in South Africa.
As constructive and informative. We were sitting around a campfire with several rangers once when we heard an animal roaring nearby. «Leopard, about 400 meters away», one ranger said. At that moment, the immediacy of nature hit home to me. I’ve learned from this sangfroid in the outback.
Fifty-seven-year-old Christoph Weber joined ZB as head of private banking and member of its top management in August of 2008. He is also deputy CEO to Martin Scholl and board head for ZKB Austria.
Before that, Weber was responsible for private banking north for Banca del Gottardo (which is now BSI, and soon-to-be EFG). He was part of AAM Privatebank AG’s management from 2000 to 2006, where he was responsible for distribution for institutional and private clients, and member of the management of Basellandschaftlichen Kantonalbank (BLKB). Like Scholl, Weber originally absolved a banking apprenticeship at ZKB.
