Switzerland and Singapore : fintech and traditional wealth managers in the focus of globalisation, digitalisation and M&A
Creators: name: Bittel, Andreas
Publisher: name: ZHAW Zürcher Hochschule für Angewandte Wissenschaften
Year: 2022
Subjects: 332: Finanzwirtschaft

description: This thesis focuses on the following research question: A comparison of fintech and traditional wealth managers in the focus of globalisation, digitalisation and M&A. This comparison is focused on Switzerland and Singapore and supported by expert interviews with St. Galler Kantonalbank AG (Switzerland), Norsia (Switzerland) and Syfe (Singapore). Finally, the Digital-Business-Transformation Matrix is applied to these three companies. 
Hereby the author claims the following three hypotheses, researched in this thesis: 
H1: The most recent geopolitical events have shown the importance of relying on local value chains. With the help of M&As, traditional wealth managers want to strengthen their local presence and push their digital business transformation. 
The conclusion is that the first hypothesis is rejected. The overall trend of divesting and re-globalisation combined with new records in M&A deals shows that companies want to focus more on their local markets. Companies near-shore value chains to be less dependent on other countries. However, this is particularly true for large companies providing their services on a broad scale globally. The expert interviews have indicated that M&As are currently only an exit solution for fintech companies. Norsia and Syfe want to expand in broader markets and establish themselves globally. The same is true for traditional wealth management companies. The St. Galler Kantonalbank AG (SGKB) has done small M&As in the past, but they focus more on strengthening their customer relationship. They are already a regional provider and want to remain as such in the future. 
H2: Due to younger generations becoming responsible for the family's wealth and their affinity to technology, fintechs are better positioned than traditional wealth managers to serve these clients. 
The second hypothesis can be validated. However, no statement can be made about B2B business structures. The hypothesis addresses B2C business models. Fintech companies indeed are more accessible to younger generations. On the other hand, Syfe is attempting to onboard older generations and be there for them. Hence, fintech companies do not only focus on younger generations. Traditional wealth managers such as the SGKB provides digital solutions to emotionalise young generations and provides special consulting opportunities for older generations to catch up. The major benefit established companies such as the SGKB have is their long existence. Regarding a B2C business model, fintech companies are more suitable to serve younger tech-savvy generations. Their degree of digitalisation in the matrix is much higher than that of traditional wealth managers. 
H3: Despite Switzerland's high rankings in various indices, the Singaporean financial industry might become a real threat to Switzerland within the next five years. 
The third hypothesis is neither validated nor rejected. Switzerland is the older country of the two. Its developments among different rankings are more efficient and stable compared to Singapore. However, both countries pursue similar objectives regarding fostering the fintech industry and attracting talents. The third hypothesis cannot be validated, considering the entire country. Focusing only on the financial industry, Switzerland still has an extraordinary strong and good image and position worldwide. On the other hand, Mr Schirmann of Norsia pointed out that Switzerland should distinguish itself from other countries by innovation and not by protecting its markets. Singapore’s fintech hub is perceived as more attractive than Switzerland’s. However, the selection will be based on whether these organizations have a thorough understanding of the country's culture, what needs its clients have, and whether more talent can be attracted.