J. Safra Sarasin's Saxo Bank acquisition signals tech investment shift in AI wealth management era

Safra CEO says Saxo deal shows need for tech scale in AI era

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). "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." 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. 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. 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." 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 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. "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." American payment firm Block (XYZ.N), opens new tab said last week it would cut nearly half its workforce as part of an overhaul to embed AI across its operations. 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 Our Standards: The Thomson Reuters Trust Principles., opens new tab

Safra CEO says Saxo deal shows need for tech scale in AI era

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). "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." 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. 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. 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." 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 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. "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." 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. 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. (Reporting by Ariane Luthi and Oliver Hirt; Editing by Tommy Reggiori Wilkes and Susan Fenton)