Increasing Importance of the Digital Application Swisscom

Swisscom AG is a major telecommunications provider in Switzerland. Along with Swiss Post, it is a successor company to the former state-owned PTT. Its headquarters are located at Worblaufen near Bern.

The Swisscom Think Tank "e-foresight" and the Institute of Financial Services IFZ train have published a study on the digital creation. The experts indicate that Swiss bank client also use digital, automated system wizard for asset management. The investment volume are especially in fully automated services but at a low level. More promising are offers that combine digital assistants and personal advice. Generally digital creation is suitable for mass production in the future. The fact that the personal consultation remains an important element, brings established banks to startups in pole position.

The increasing digitization also characterizes banking services. After services in the field of online loans are generated in Switzerland now also increasingly products in the field of digital application. Which business models of the digital application are most in demand and thus have the best long-term development prospects, show the Banking Think Tank e-foresight of Swisscom and the Institute of Financial Services IFZ train in a joint study on.

Established business models in the digital creation

Based on the market analysis in Switzerland, in Germany, the UK and the US defined the study four business models in the digital creation: Robo Advisor, Social Trading, hybrid model, Consulting assisted digital creation. "Robo Advisors' work highly standardized, automated and without personal interactions. "Social Trading" focuses on social networks: Users can share their own trading strategies or investing in already published other trading strategies. "Consulting-assisted digital creation" is highly thought through, customizable and offers the possibility for personal advice. This business model is the current bank offers the next. The "hybrid model" combines features of Robo Advisors and selective counseling support. Depending on the business model, a provider may charge different fees. Through Items in digital applying the pressure on margins in the banking business continues to grow.

So far only a few deals in Switzerland

In Switzerland, offered all four models. Compared to Germany, the UK and the US there is the Swiss market but still at an early stage. Both in the US as well as in the German market digital creation exists in the field had won a number of offers from established financial service providers and start-ups, while there is currently in Switzerland only a few deals, such as those of the Glarner Kantonalbank, True Wealth or UBS. Swisscom and the IFZ assume, but that more banks and Fintech startups launching their solutions in the coming years and the assets under management are expected to expand significantly.

Demand increases; Confidence and skills remain crucial

Of the 821 Swiss individuals who were interviewed for the study, a majority can imagine, to invest some of their assets via digital system solutions. While 44 percent of respondents would digitally create only 10 to 30 percent, a quarter has indicated more than 30 percent of their assets by using digital investment products to invest. The survey shows that confidence and competence indeed have the highest importance, but also customers want the freedom of a digital order. As the most important reason for the use of digital system solutions, respondents mention the simplicity in terms of intuitive use and comprehensibility. As the most cited reason against the usage of safety concerns are given. Another important aspect are low costs. With a comparably good offer 69 percent of the respondents would prefer the digital offer its bank over an external provider.

Significant volume by 2020, Robo Advisors remain a niche

The study predicts that the Swiss market for digital creation in the coming years is growing at double-digit rates. In the baseline scenario, the study is based on a market volume of CHF 54.3 billion in 2020. This would represent nine percent of the total market, with which most of this volume is accounted for by consulting aided digital creation. The importance of Robo Advisors will increase in the future, however, the scale capacity will remain at a relatively low level. Depending on the scenario, manage suppliers in this area in 2020 investment volume of between one and eight billion Swiss francs.