HSG, EY and ETH collaboration: Redesigning Financial Services

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  • HSG, EY and ETH founding research syndicate: development of financial services through eight research areas
  • Kickoff event on the future of wealth management on May 17
  • First publication released: “Is wealth management facing its Kodak moment?”

ZURICH, 17. MAY 2017 – The University of St. Gallen (HSG), EY and ETH Zurich have initiated a research consortium titled Redesigning Financial Services, which focuses on developing, prototyping and testing new customer-centric financial services.

With its kickoff event on 17 May in the Aura in Zurich, the research consortium is organizing its first public event, which will be focused on disruption in wealth management as well as opportunities and threats for incumbents. In its first publication, “Is wealth management facing its Kodak moment?”, Redesigning Financial Services analyzes disruptive forces in wealth management – from system-based advice at lower costs and higher customization potential to customer empowerment tools like transactional platforms and the banking-as-a-platform movement.

Robert Ruttmann, founder of Redesigning Financial Services and Head of the Competence Center for Sustainability and Financial Services at the University of St. Gallen, explains: “We are building an open, international ecosystem to jointly shape the future of the financial services sector with a deep commitment to understanding customer preferences and customer response to new technologies.”

“We are proud to support this initiative, joining forces with technology as well as customer insight research teams. EY brings its integrated transformation advisory expertise on redesigning business models and strategies to the table. Together with leading financial services clients joining the initiative, we will design, prototype and test new client-centric business models,” says Olaf Toepfer, Managing Partner Banking, EY Switzerland.

“The scientific focus will lie on the seamless integration of the latest technologies in the targeted client journey and experience, by putting the perspective of the end customer first,” explains Prof. Ernst Mohr from the Institutes for Customer Insight and Technology Management of HSG.

Is wealth management facing its Kodak moment?
Wealth management is undergoing developments that risk commoditizing the traditionally high value services at a time when customers’ expectations on higher personalization, efficiency and lower costs continue to grow.

The five key insights that wealth managers can adapt to reshape the industry can be summarized as follows:

  1. Accept that instantaneous arbitrage is here to stay
  2. As services become commoditized, define a clear value-add
  3. Understand the growing primacy of personalization
  4. Recognize threats from outside the industry
  5. Learn organizational ambidexterity

“The transformation of wealth management is rooted in a power shift in the industry’s value chain toward regulators and clients,” explains Olaf Toepfer. “The deep structural transformation is accelerated by three main drivers: growing competition from financial technology companies, changing client expectations and strong regulatory pressure,” Toepfer continues. “Wealth managers will be increasingly discouraged from receiving commissions when their clients purchase investment products, and they will face rigorous requirements to provide independent advice in the best interest of the client.”

The focus of the HSG-EY-ETH research consortium
The objective of the collaboration is to identify disruptive innovations early on, to measure and anticipate their impact on customer behavior and to recommend ways in which banks, insurance companies and wealth management companies can thrive.

There is a fundamental change in the way consumers interact with their financial services providers – in the way they make payments, lend, insure against risk and how they invest. To better understand the opportunities emerging from these shifts, the consortium’s research work focuses on structural change in eight key areas:

  1. Credit & Lending – from P2P to crowd funding and automatization
  2. Payments – from mobile payments to micro payments
  3. Blockchain and cryptocurrencies – from online markets to P2P transfers
  4. Wealth Advice – from automatization to natural language analytics
  5. Digital Capital Markets – from new platforms to big data and artificial intelligence
  6. RegTech – automatization and data analytics
  7. InsurTech – digital insurance, from sharing economy to wearables and internet of things
  8. Innovations for Social Impact, from Angel investors to social trading

Joining partner companies can enter specific research questions, share the cost for the development of new business models or of making investments in cutting edge start-ups and of prototyping and testing new products and services in the customer insights laboratory. No one party alone today is capable of finding answers to the challenges of structural transformation. The emerging ecosystem around this initiative will bring together all required competencies to find answers to unanswered questions on how the industry will transform.

About Redesigning Financial Services (RFS):
Redesigning Financial Services (RFS) is an interdisciplinary collaboration of the University of St. Gallen (HSG), the Federal institute of Technology (ETH) and EY (Ernst & Young AG), a leading Swiss professional services provider in the financial services industry. The interdisciplinary think tank combines expertise around customer research, corporate strategy and transformation of business models, applying innovative technologies and management methods. It is based on the premise that a deep understanding of client behavior is key to thriving in the next evolution in financial services. The initiative enables financial services companies and scientific institutions to join as partners and combine efforts in understanding the opportunities and threats from structural change in eight areas, developing new services, prototyping and testing them: Credit & Lending, Payments, Blockchain, Wealth Advice, Digital Capital Markets, RegTech, InsurTech and Innovations for Social Impact. For more information visit: https://redesigning-fs.com/


About EY

EY* is one of Switzerland’s largest audit and advisory firms. EY employs about 2,700 people across 11 offices in Switzerland and Liechtenstein, and generated revenue of approx. CHF 661 million in the 2015/2016 financial year. Together with the 231,000 employees of the global EY organization, EY serves clients all over the world. EY offers an extensive portfolio of services to large as well as small and medium-sized businesses: integrated transformation advisory from strategy to IT architecture, assurance, transaction, tax, legal and people advisory services. Our highly trained staff, strong teams and local base in a globally integrated organization allow us to overcome the challenges our clients face. We are committed to “Building a better working world” – for our people, for our clients and for our communities.

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* The name EY refers here to Ernst & Young Ltd, the Swiss member firm of Ernst & Young Global Limited (EYG), a UK company limited by guarantee. Each EYG member firm is a separate legal entity and has no liability for another such entity’s acts or omissions.