This publication spoke to Lombard Odier's private banking business in London recently about developments such as the value that it sees in its global custody system, as well as how it is positioned in the market.

While being one of the most venerable names in banking, Switzerland’s Lombard Odier knows that if it doesn’t innovate, then no amount of appeals to glorious tradition will work. The firm is seeking to stand out as an innovator on the investment side. (See here.) Within its private banking arm, meanwhile, an area of development that might not at first set the pulse racing, but is crucial, is custody and reporting.

This publication recently met with Dominic Tremlett, chief executive officer at Lombard Odier Private Bank in London, at its offices in the West End. He is part of a business that in total, at the end of December last year, oversaw $198 billion of assets, making it one of the bigger hitters in this segment of the marketplace. As for Tremlett, he has had a distinctly international career. He has been at his current employer for three years and had worked at Barclays for 23 years; most of his career has been in the wealth management space in jurisdictions such as Monaco, Geneva and the UK.

Tremlett was keen to talk about the bank’s global custody and reporting offering, an in house development that is part of the firm’s proprietary operating system known more snappily as G2. Selected other partners are allowed to use the system.  

The bank’s operating platform is no spring chicken as it started 30 years ago and has been updated ever since. G2 was developed in the 90s and used by ultra high net worth clients and family offices.

What is unique about G2?

“[It is] the ability to show the current picture of a client’s global wealth and assets in the same reporting format at the click of a button. It will soon be available (via the G3 app) via iPads and mobiles. Selected other banks are allowed to use the same G2 platform,” Tremlett said.

He said what is distinct about G2 is that it enables the portfolio manager to concentrate 100 per cent on wealth management; the system has a single point of contact for clients for all securities administration issues; it is efficient and has access to global risk management. In this day and age, Tremlett argues, such capabilities are must-haves for clients and managers alike.

“We are working with a number of family offices in the UK and Switzerland to use this system; also, a small private bank in Belgium is using the system. We are one of the few banks that has built an IT system specifically around wealth management,” he said.

Picking up clients
Echoing views made by a number of other boutique players in recent months, Tremlett said Lombard Odier is getting a good deal of business from clients not just unhappy at the kind of service – or lack thereof – from some big banks that back out of sub-scale markets.

“A lot of big banks are cutting back in markets,” he said, saying that clients are being turned away and having to re-think their bank relationships.

In London, there are two main businesses – the institutional asset management team, with a group of over 100 people; and private wealth management, with 35 people. As far as the latter is concerned, “we are in growth mode”, Tremlett said. “There’s a gap in the market in the UK for a private bank to come in and deliver services people are looking for. Clients don’t want a standard packaged product,” Tremlett said.

“I am looking to hire additional bankers into the [private wealth management] team in 2014," he said, adding that he might hire up to five senior bankers by the end of this year.

Tremlett seems to be enjoying his return to London after long stints on the Continent, notwithstanding the niggles that can come with living in such a big, crowded city such as London. “It is very professional here….it is very open to innovation. It is becoming ever more international…Switzerland is probably still a bit more international, although the UK should overtake it,” he added.

At its original Geneva home, of course, Lombard Odier, like its peers, has faced strong pressures for change, and not just concerning the country’s decades-old bank secrecy laws. At the beginning of this year, the firm, along with rivals such as Pictet, restructured its old ownership model of unlimited liability family partners to meet a new reality of greater global scale and hence, potential risk. (For more detail on this, see here and here.) It looks as if the kind of innovations that Tremlett is talking about hold a key to how Swiss banks of a certain type will attempt to adjust to new realities.