Zurich-based private bank Julius Baer published an updated strategic plan for the years 2023 to 2025, in which the bank recognizes the potential of digital assets and aligns its strategy accordingly.
The updated strategy plan of the Swiss bank sees a focus on value creation for their customers and sustainable profitability. In addition, a scaling through promotion of asset management via digital developments is to take place. In addition to the current investments in alternative investments such as private markets and real estate, the group wants to explore and expand the emerging asset class of digital assets.
Innovation through digital progress
Julius Bär Group plans to invest around 400 million Swiss francs in technology in the next few years. Technology-oriented future investments are to be used to expand external technology partnerships as well as support customer advisers and create a new digital "wealth management solution".
"We are initiating a new phase of profitable growth, building on the transformation we pursued successfully since 2020. Our unique client-centric business model and our dedicated focus on high and ultra-high net worth clients put us in a strong competitive position to shape our future." -Philipp Rickenbacher, Chief Executive Officer Julius Baer
The bank had already made an investment in the crypto specialist SEBA Bank back in 2019 as part of its external partnerships for digital assets. From Julius Baer's point of view, this was the perfect solution for avoiding the need to set up its own infrastructure for storing and managing risks associated with digital investments. Even then, the crypto sector was a "legitimate, sustainable investment class" for the company, and customers could simply trade and invest in digital assets through SEBA Bank.
Digital assets and DeFi are being integrated more and more into banking services
Julius Baer wants to position itself firmly at the interface between digital assets and the fiat world by integrating the digital asset class into its comprehensive asset management offering. Furthermore, the asset manager sees itself well equipped to successfully steer both its customers and their business through the upheavals that decentralized finance will inevitably bring.
The bank is positioning itself specifically in the new field of digital assets and recognizes the opportunities in the area. Julius Bar also expects a future merger with the traditional financial sector in the emerging area of decentralized finance.
US banks leading the way
The integration of digital assets into the service offerings of traditional financial institutions is progressing globally. Last year, in particular, the US banks positioned themselves visibly in this area. JP Morgan, Goldman Sachs, Citibank, Fidelity, the list of US financial institutions offering their customers services and research in this area is now comprehensive. In Europe, the first engagement of traditional financial institutions in this area was observed with the Sparkasse and Banca Generali.
Even though there were already specialized institutes and innovative asset managers focusing on digital assets very early on in Switzerland, the big Swiss banks are still lagging behind. With managed assets of 486 billion CHF, Bank Bär is one of the largest asset managers in Europe. It recognizes the need, in its new strategy, to cover the new asset class as a professional asset management company.
The integration of digital assets into the service offering of traditional financial institutions is advancing globally. Last year, major US banks in particular visibly positioned themselves in this area. JP Morgan, Goldman Sachs, Citibank, Fidelity, the list of US financial institutions offering services and research in the area to their customers is now comprehensive. In Europe, the first involvement of traditional financial institutions in the field was also observable with German bank and.
Although specialized institutions and innovative asset managers focused on digital assets at a very early stage in Switzerland, the major Swiss banks are still lagging behind. With CHF 486 billion in assets under management, Bank Baer is one of the largest European asset managers. In its new strategy, it recognizes the need to cover the new asset class as a professional asset management house.
It remains to be seen how long Switzerland's two largest banks, UBS Group and Credit Suisse, will take to position themselves in the digital asset space. A CVJ.CH request regarding a digital asset strategy went unanswered by both institutions.