Vontobel has bundled its global digital offering which covers the creation and distribution of structured investment solutions with the expansion of its front-to-end offering for insurers and financial services providers via a 'white labelling' service and the addition of two units within its new Partner Solutions business.
With this step, Vontobel is driving forward the expansion of its existing platform deritrade MIP and is laying the foundations for the continued growth of its activities in this area, according to Roger Studer (pictured), head of Vontobel investment banking.
"Opening our platform for structured investment solutions for third parties represents the next step in our digital offering footprint for structured products," said Studer. "We have been investing heavily in our deritrade MIP and have now very good volumes, i.e. the bought volumes of yield enhancing products on deritrade MIP are already higher than that of the SIX Swiss Exchange."
By providing third parties with access to Deritrade, Vontobel is now enabling 'white labelling' partners from the finance and insurance industries "to benefit from its expertise and cost leadership" via a complete front-to-end offering. According to Studer, in contrast to traditional solutions available in the market, Vontobel is offering a "Mifid-compliant open architecture" approach for all product components in White Labelling 2.0 which is aimed at enabling the best-price principle to be applied to the purchase of all product components for the first time. Based on this new approach, Vontobel's platform partners can generate substantial added value for themselves and their clients, said Studer.
"For the last few months we finalised our "open deritrade" to more than a dozen investment banks allowing the trading of the embedded derivative part of structured products to be very efficient and transparent," said Studer.
As a result of this development which is being rolled-out in Europe and Asia, the bank's multi-issuer platform unit headed by Gerhard Meier will be bundled within a new Partner Solutions business area, which will also comprise two newly created units - Platform Partners and Pension Solutions - and will be managed by Eric Wasescha with effect from today, March 30, 2016.
Wasescha began his career in finance at the bank known today as Safra Sarasin and was the founder and chief executive of Derivative Partners, the owner of derivative.com, Vontobel's main competitor in the multi-issuer platform segment in Switzerland, which was sold to the Swiss bank in May 2014, because it could not attract a "critical mass of automated issuers". At the time of the sale, issuers offering and quoting prices for their structured products on the multi issuer platform operated by derivative.com included Zürcher Kantonalbank, Bank Sarasin, Natixis, ING, Commerzbank, Nomura, RBC, Morgan Stanley, JP Morgan and Rabobank.
Derivative.com was one of the first multi-issuer independent issuance platforms for structured products. The trading platform was launched in 2010 and was aimed at banks and asset managers looking for quotes on tailor-made issuance of structured investment products with multiple issuers.
Wasescha was also executive director of the Swiss Structured Products Association (SSPA) between 2006 and 2011, and a member of the board of directors at the European Structured Investment Products Association (Eusipa) between 2008 and 2012.
According to Studer, this is the first time "a leading financial services provider is offering a comprehensive digital business process outsourcing solution for the structured products business that does not require any exclusivity in the areas of purchasing or distribution". "This is also a leading offering worldwide in terms of best price and best execution," said Studer.
Vontobel's financial products business continued its pan-European expansion in 2015 with its market debut in the Swedish market and Finland. The bank reported last month that more than 30 banks and over 300 asset managers use Deritrade MIP which recorded a notional volume of CHF2.2bn of products issued on the platform in 2015- an increase of 267% compared to the previous year. The platform also recorded over 4,000 users, 5,000 simulations per week, and 70% of primary market products.
In addition, the bank said organic growth continued to be supported by innovations in 2015 on its Deritrade MIP open platform for structured products and "the successful development" of Deritrade SmartGuide, a new decision-making tool for investments in structured products based on smart and crowd data in February. In addition, Vontobel also tapped into the mobile banking solutions segment with a new mobile private banking app for Swiss private banks also in February.
SRP data shows that the Swiss bank sold over US$6.9bn in structured products across jurisdictions in 2015 and had a 3% global market share excluding non-retail, leverage and flow products.
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