By Ariane Luthi and Oliver Hirt ZURICH, March 2 (Reuters) - J. Safra Sarasin's acquisition of Denmark's Saxo Bank, which has a digital trading and investment platform, reflects wealth managers' need
Safra CEO: Saxo Acquisition Underscores Urgent Need for AI-Driven Tech Scale
The Impact of AI and Technology on Wealth Management
By Ariane Luthi and Oliver Hirt
Safra’s Strategic Acquisition of Saxo Bank
ZURICH, March 2 (Reuters) - J. Safra Sarasin's acquisition of Denmark's Saxo Bank, which has a digital trading and investment platform, reflects wealth managers' need to invest more in technology as AI threatens to shake up the business, the Swiss private bank's CEO told Reuters.
Safra completed on Monday its purchase of a 70% stake in Saxo in a deal worth around 1.1 billion euro ($1.30 billion).
Technology Architecture and Agility
"Saxo is all about the technology architecture," J. Safra Sarasin's CEO Daniel Belfer said. "It's all about the agility to make changes that are coming to the market and adapting to customer demands quickly."
AI’s Disruption of the Wealth Management Model
Shares of wealth managers tumbled in February as investors worried that new AI tools could damage their business model by undercutting demand for financial advice.
Emergence of AI Tools in Financial Services
AI lab Anthropic last week unveiled new ways for businesses to use its plug-ins in their work, including for wealth-management tasks such as portfolio analysis. That followed start-up Altruist introducing AI-enabled tax planning features.
Shift in Investment Strategies
The AI transformation is likely to shift banks' return-on-investment calculus toward investing in frontier technology, rather than relying on the old playbook of acquiring wealth managers to expand their client base, said Christian Edelmann, a banking expert at consultancy Oliver Wyman.
J. Safra Sarasin is still looking at traditional acquisitions, but with Saxo Bank, tech was the main factor, Belfer said.
"AI will be everywhere," he added. "You will still have people, but you'll be able to give a lot more detail to the client on their account."
Leadership Changes and Future Outlook
Executive Transitions at Saxo Bank
Belfer will become CEO of Saxo as well following the merger, replacing Kim Fournais who will step down and chair the Danish bank's board of directors, Saxo said on Monday.
Generative AI’s Role in Personalization
Generative AI is already enabling hyper-personalised services, making historically uneconomic segments cheaper to serve while boosting adviser productivity in higher-wealth segments, Edelmann at Oliver Wyman said.
Automated Workflows and Workforce Evolution
"We're moving towards automated workflows with human oversight," he said. "In three years, people in the workforce will no longer be doing what they are doing today."
Industry-Wide AI Adoption
American payment firm Block said last week it would cut nearly half its workforce as part of an overhaul to embed AI across its operations.
Broader Wealth Management Trends
Banks across Europe have been expanding into wealth management to grow fee income. Britain's NatWest this month announced a 2.7 billion pound deal to buy Evelyn Partners.
($1 = 0.8491 euros)
(Reporting by Ariane Luthi and Oliver Hirt; Editing by Tommy Reggiori Wilkes and Susan Fenton)
