The challenge

 Payments are a fundamental part of any business and payment providers are facing disruption from innovative new players, new service offerings and increased regulation. This is certainly having an impact on wealth and asset management institutions and their payment operations as well.

While MiFID II has kept the wealth and asset management sector busy over the last months, the Second Payment Services Directive (PSD2), which aims at increasing the security of online payments and providing greater competition and transparency, has also had an impact on investment-led service companies.

Since it took effect in January 2018, PSD2 poses a completely new challenge for financial institutions, as third parties can access customer account data. This paradigm shift has the power of significantly redesigning the market. While some have considered this change a threat, at Pictet we see great opportunities arising from it.

With PSD2, from a business strategy point of view, every financial institution is able to design new products and services by analyzing the type of services their customers consume from Third Party Providers. This will turn out to be a substantial advantage to investment banking clients, as they will be able to test new services and compare multiple value propositions. In this context, data analysis will be critical to understand what the client’s needs are and to come up with suitable services and advice based on those needs.

Compliance undeniably involves significant investment. At Pictet we may have a long tradition but we are fully committed to innovation. Every day we work on ways to look after our clients even better, whether that be by identifying new investment trends or by developing our services further. That is why we believe that regulation is certainly an opportunity to enhance existing business models in a new competitive landscape. The development of digital technologies will surely have a role in enhancing our interaction with clients.

The solution 

To address this complex compliance-related challenge, we chose to work with Finologee, a Luxembourg-based FinTech and RegTech specialist focusing on building digital platforms for the financial industry, whose values are aligned with what we look for in our partners.

Finologee’s founders have extensive expertise in building and running business critical finance platforms as well as providing secure and reliable APIs through their Trusted FinTech Platform, which simplifies connectivity between financial services professionals and institutional players on one hand and a variety of FinTech solution providers on the other.

As we are subject to certain confidentiality and/or secrecy obligations, our top priority is to work with providers that are fully in line with said obligations. Finologee operates a one-stop shop for FinTech building blocks in full compliance with financial industry regulation, under a double PSF Support Licence and under the supervision of the Commission de Surveillance du Secteur Financier (CSSF).

The outcome 

Finologee has not only developed a robust PSD2 platform for Pictet with a PSD2 testing environment and documentation to support our Third Party Providers (TPP), but also, they have assisted the organisation from day one, together with an advisory firm, to clearly define intricate requirements of such an ambitious project, having our customer’s privacy and security as the ultimate priority. Finologee’s teams are highly proactive and flexible, and they have the capacity to deliver in spite any arising constraints.

[toggle title =”About Pictet“] Pictet is an investment-led service company, offering wealth management, asset management and related services.
It is a partnership of eight owner-managers and their principles of succession and transmission of ownership have remained unchanged since foundation in 1805. Pictet’s purpose is to build responsible partnerships with their clients, communities, and the companies in which they invest, in order to safeguard and transmit wealth, of all kinds, in the service of the real economy.

There have been only 42 partners since Pictet was founded in 1805. Headquartered in Geneva, Switzerland, Pictet employs more than 4,300 people across 27 offices in 17 countries around the world. With more than CHF 496 billion in assets under management or custody at 31 December 2018, Pictet is today one of the leading Europe-based independent wealth and asset managers. [/toggle]