Enabling the transition from secrecy to a new world of transparency
Michiel van Selm, the new COO of Singapore based FinTech business Canopy, spoke at the Digital Wealth Asia event on November 9 and set out his vision of the future of wealth management. He also highlighted the relationship Canopy had evolved with the global Swiss banking giant Credit Suisse, which just over a month later took a 10% stake in the fintech as Canopy raised $3.4 million of new funds.
The success of our relationship thus far with Credit Suisse has been well documented, so my focus today will be on how the business of wealth management and private banking will change as the banking and financial services industry evolves from the old world of secrecy to the new paradigm of transparency.”
A transparent ecosystem
Van Selm’s reference to transparency is all-encompassing, meaning transparency in the ecosystem as the world’s trading and regulatory systems evolve. Digitising the private banking experience is central to working within this evolution rather than fighting against it as if a stoppable revolution.
Van Selm also referred to new Google technology to allow online translation and the implication there is all private discussions can be digitised as well, which means even private banking relationships that were previously behind closed doors will be digitised and accessible. Moreover, says van Selm, information will no longer be compartmentalised, which will radically change the way private banks manage their relationships with clients, and vice versa.
“We are moving from a situation of lots of hidden information to transparency, accessibility, moving from an analog world to a digital world. Imagine, for example, the relationship manager might have access to the holdings of the client in different banks and where the client can access whomever they want within the bank, but potentially also the regulator.
The regulator meanwhile might also get access to all the information in the bank and instead of doing spot check audits, they might run their analytical models on the information available in the banks. “If one starts thinking about all this it will have a very significant impact on how you work, how you capture information and how you manage that,” van Selm remarks.
Lower returns on assets, higher added value
In this new world, Canopy envisages a changing business model for the wealth industry. “Diminished returns on investments and lower fees, lower commissions because if you have more information you can start thinking about how can I use that information to add value,” he explains. “With information accessible, holistic advice can also be available, but at the same time the RM will become more efficient and research driven and use analytics, to come up with the right advice and the right recommendation.”
Van Helm then turned to the Canopy product itself. “As we have done for Credit Suisse, we have created a solution whereby we aggregate data from various sources, from different banks and we consolidate that into one view, so the client will have a complete view of all of his holdings across different banks. But it also includes other assets like real estate, or jewellery, gold, collectibles or whatever the client has.”
Trusting the data mining
One single view of the net worth of the portfolio of the client is created and that is provided to the client as a service. It is a process whereby the client builds confidence and vice versa. “Once the client starts to feel comfortable it is much about having a trusted relationship with the client and the client then giving access to the relationship manager,” explains van Helm.
“And for the RM you suddenly see the full picture whereas you might previously have seen only 20% or less. You are then able to add value. Instead of advising on a ‘siloed’ view of the client’s holdings the RM would suddenly be able to really give a holistic view.”
In conclusion van Helm crystallised his view of transparency in all parts of the ecosystem - between the client and the RM, between the RM and the bank, between the bank the regulator. “This will not happen overnight, but it will happen and to prepare for this the banks need to have the capabilities in place.”
Credit Suisse puts its money behind Canopy with 10% stake
Credit Suisse has voted with its wallet by taking a 10% stake in fintech Canopy Pte Ltd., a Singapore-based data aggregation platform for the wealth management industry.
Canopy on December 14 raised US$3.4 million of new money from investors that included Switzerland’s second-largest bank Credit Suisse.
Canopy was formerly known as Mesitis; it is an anonymous account aggregation and analytics platform for financial institutions, wealth management professionals, and high net worth individuals.
The unique feature of the platform is that it aggregates financial data across all banks and asset classes into a single portfolio, and does so from users’ financial statements. It does this anonymously., in other words the names of the clients are not attached to the data.
The analytics reports are in the form of an interactive web application accessible from any browser-enabled computer, tablet or smartphone.
Clients can upload any asset, any currency in any file format for standardisation and thereby provide the client and the advisers a holistic view of the wealth diversification of any client. This then allows the advisory community to, theoretically, give a more accurate and relevant advice flow than ever before.
Credit Suisse has been a customer of Canopy for some time, incorporating its fintech solution into the digital banking platform the bank has been developing since 2011.
“Our collaboration with Canopy is an important milestone whereby we aim to extend our existing digital private banking service offering through more comprehensive solutions and services for our clients.” Those are the words of Francesco de Ferrari, Head of Private Banking Asia Pacific at Credit Suisse and CEO for Southeast Asia, before the new 10% stake was announced.
The new money will support new product development as Canopy’s growth surges in Singapore and across other Asian and global financial centres.
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