VP Bank’s Strategy 2026 builds on its strong existing business in Liechtenstein and in five international locations and develops that business further in a targeted manner. With an open IT platform for investment-related services, traditional banking will in future be combined with the advantages of digital ecosystems. This way, the Bank is opening up new, future-oriented business opportunities.
1. Business model
International representation with local roots
Founded in 1956 in Vaduz, VP Bank has evolved into an internationally oriented banking group, and today is one of the three largest banks in Liechtenstein. Strengths and unique selling propositions have emerged from its intermediary business. VP Bank’s founder, Guido Feger, was a successful entrepreneur and one of Liechtenstein’s most significant trustees. Building on this tradition and the accompanying track record, VP Bank continues to offer top-notch solutions and client services for trustees, external asset managers, family offices and other professional financial service providers. It also makes its in-depth expertise, personal advice and its international network available to wealthy private clients in the area of private banking. In its attractive home market of Liechtenstein, retail and corporate client business is a further strategic focus area.
Intermediaries include professional financial service providers, in particular trustees, external asset managers and family offices. Business and cooperation with intermediaries is a strategic focus area. The bank invests accordingly in the continuous expansion of its range of services, easy access to expert and market opinions, and the maintenance of modern and secure data interfaces.
VP Bank is an experienced partner for wealthy private individuals. Its core competencies consist of customised wealth management (incl. client solutions), investment consulting, wealth planning and financing. Sustainability is an integral part of all investment and advisory processes. Key services are provided in all locations, and holistic advisory services are provided at select locations.
Retail & Commercial Banking in Liechtenstein
In the Bank’s home market of Liechtenstein, business with intermediaries and wealthy private clients is supplemented by retail business and corporate client business. This business segment makes an important contribution to the Group-wide revenue mix. This includes basic banking services such as savings and payment transactions, real estate and business financing, as well as a discounted offer for young people and students. The products and client services are distributed through personal and hybrid consultation via digital channels.
VP Bank has an international fund competence centre at its disposal, which encompasses business with third-party funds, private label funds as well as in-house funds. The fund related services range from the establishment of funds, fund administration, risk management, custodian bank, custodian bank business, UCITS- or AIFMD-compliant management, management companies and sales support to fund brokerage and portfolio management.
2. Regions and locations
VP Bank Group’s services are offered in key financial centres through its home market of Liechtenstein and its five international locations in Switzerland, Luxembourg, Singapore, Hong Kong and the British Virgin Islands (BVI).
The responsibilities for market development are organ- ised regionally. The three regions – Liechtenstein incl. BVI, Europe and Asia – are responsible for the results and are supported by the Group at a functional level. The regional development plans are tailored to local growth opportunities in our core segments and support profitable and sustainable growth in the target markets.
Liechtenstein region (incl. British Virgin Islands)
Liechtenstein has been the location of the Group’s head office and VP Bank’s home market region since 1956. A comprehensive range of intermediary and private banking client services is complemented by fund services and a significant universal banking business. In addition to Liechtenstein, the target markets also include the neighbouring regions of Switzerland and Germany.
VP Bank has been represented by a subsidiary in the British Virgin Islands (BVI) since 1995. VP Bank (BVI) Ltd acts primarily as a real estate and credit financier, augmented by first-class investment solutions.
VP Bank has been represented in Switzerland by its subsidiary VP Bank (Switzerland) Ltd in Zurich since 1988. It offers a state-of-the-art client services platform for intermediaries and comprehensive advice for wealthy individuals. The development of the target markets for Switzerland, Germany, Central and Eastern Europe is managed from Zurich. Russia is no longer a target market for VP Bank Group following Russia’s attack on Ukraine. New clients domi- ciled in Russia and Belarus will no longer be accepted. Germany has traditionally been a target market for VP Bank for many years. VP Bank takes advantage of the opportunities afforded by a simplified exemption in Germany. This exemption allows VP Bank (Switzerland) Ltd to directly and actively attract clients in Germany and to serve them across the border.
Luxembourg is a centre of excellence for fund solutions in Europe. Through VP Fund Solutions (Luxembourg) SA, comprehensive fund solutions have been offered as a one-stop shop since 1993. VP Bank (Luxembourg) SA, founded in 1988, offers cross-border wealth management services to wealthy private individuals in Luxembourg as well as in Scandinavia (Denmark, Norway and Sweden). It also offers a modern service platform to intermediaries.
VP Bank has been represented as an asset manager in Hong Kong since 2006, and in Singapore with a licensed banking branch since 2008. In the Asian region, this provides a growing number of intermediaries with a state-of-the-art service platform, and wealthy private clients with advisory services in wealth management. Besides Singapore and Hong Kong, the target markets are Indonesia, Malaysia, Thailand and the Philippines. China, which is attractive for growth in wealth management, is handled through cooperation with the recognised Chinese financial services provider Hywin Wealth International, which operates out of Hong Kong.
3. Strategy 2026 – Seizing opportunities
Combination of traditional investment advisory services with the advantages of digital ecosystems
The foundation of the Strategy 2026 builds on successful existing business with intermediaries and private clients, which is being developed with a regional approach in a targeted manner. The individual regional development plans are aimed at achieving growth in the home market and at all five international locations in a focussed approach based on the respective local strengths.
However, wealth management also needs new ideas and business models in order to offer clients an attractive and differentiated value proposition in the future. The decisive drivers in this regard are the accelerated transformation due to technological change, the fundamental issues concerning sustainability and the upcoming shift to the first generations of digital natives. The value chains of financial service providers are being reorganised and client needs must be met more individually. Combining the traditional wealth management business with the benefits of digital ecosystems is therefore at the heart of VP Bank’s strategic development. By combining trustworthy, competent advice with complementary services from third-party providers, VP Bank is evolving into an ecosystem that makes a broad range of wealth-related services accessible to its clientèle. In addition, VP Bank is selectively expanding its sources of income.
Strategy 2026 will further develop the service world for intermediaries and wealthy private clients. In future, clients will choose from a set of modular options that will include services provided not only VP Bank, but also those on offer from complementary third-party service providers. They will be able to do this seamlessly across all media, without necessarily having to be a banking or securities account holder with VP Bank. Providing non-clients with access to parts of the offer enables the Bank to increase the available market significantly by tapping into its existing strong network of intermediaries. The long-term personal collaboration we offer through our advisers remains key to this strategy. Assets and their management is a personal matter, and in these times of a multiplicity of interchangeable options, the Bank continues to attach the highest importance to advice and trust.
Strategic focus areas and initiatives
VP Bank pursues its goals through clearly defined strategic focus areas. With “Evolve”, it builds on its strengths and further develops the existing Group-wide business in the home market and at the international locations with a regional approach. “Scale” optimises and scales bank-wide processes and systems. This will create the technical foundation for the further development of the business model and exploit efficiency opportunities. With “Move”, selective new business opportunities are opened up. This currently includes curated access to private market solutions or the digitisation of previously unbankable real assets. The implementation of the priorities is based on twelve strategic initiatives.
The initiatives within “Evolve” promote profitable growth and the targeted further development of existing locations and core segments. The focus is on the following three strategic initiatives:
Frontline Excellence aims to create unique and sustainable client experiences as well as to provide clients with holistic and forward-looking advice on their specific asset situa- tion. In addition to regular training and coaching, this also includes reviewing existing processes, the consideration of increasing regulatory requirements, the introduction of structured sales instruments and new tools. This is all done with a view to supporting the advice provided by ourselves throughout the life cycle of a client relationship.
The systematic consideration of sustainability issues at both bank and investment level is a cornerstone of Strategy 2026. Investing for Change aims to offer clients the greatest possible transparency and guidance with regard to the sustainability of their investments. A focus is also being placed on the development of new sustainable products and client services, for example the unique Sustainability Plus Mandate.
With the Regional Roadmaps, the Liechtenstein home market and the international locations are further developed on the basis of a regional approach. Growth through a focus on expanding local networks and in-depth market knowledge is the goal. High importance is attached to filling regional and local responsibilities.
With the initiatives within “Scale”, VP Bank is striving to further increase effectiveness and efficiency within the Group. The focus is on the following three strategic initiatives:
Process management should ensure faster and simpler business processes for clients. In addition to the improvement of forms and processes, primary measures also include the introduction of digital tools for the opening of client relationships and master data management.
The Platform Foundation initiative involves opening up the core banking system and creating the technical basis for the Open Wealth Service Platform. In addition, the entire IT architecture was modernised and the IT infrastructure was outsourced to our technology partner Swisscom. With the constant increase in data standardisation playing an important role in this process. Partnerships and the transition to the use of cloud services also form part of this initiative. In addition, the Workplace of the Future is currently being introduced for VP Bank employees.
Efficiency gains and cost discipline were at the heart of Project Athene, which was completed in the interim.
The initiatives within “Move” serve to develop additional sources of income through selective expansion into new business areas. Implementation is based on a set of three initiatives.
Within the Open Wealth Service Platform, client processes are gradually relaunched using digital applications, developed in an agile manner and introduced to the market. One example is a digital account opening process for intermediaries, which is currently being validated in the trial phase with individual clients.
The Data Analytics initiative aims to provide data-based, personalised client advice. based on the foundations of a data analysis platform.
With Digital Assets, VP Bank is the first regulated bank of Liechtenstein that can display real assets, for example, works of art, in a bankable manner. This blockchain-based client solution is being successively developed for the future. This initiative also draws the attention of potential clients to VP Bank, and therefore to its core business.
The three strategic focus areas of “Evolve”, “Scale” and “Move” are flanked by three further initiatives that form the foundation of the strategy development of VP Bank Group.
The Financial Steering Framework will automate the Bank’s reporting and will also improve the corresponding analytical processes. This is intended to further develop the Bank’s stable, financial steering and facilitate a more efficient and effective reporting system overall.
The People Strategy aims to support, further develop and appreciate employees. Through regular training, targeted employee development, agile working practices, a culture of trust and entrepreneurial thinking, VP Bank empowers employees with their diverse talents to share their knowledge and to contribute their skills effectively. At the same time, VP Bank should be able to operate successfully as an attractive employer in today’s and tomorrow’s international labour market.
The Risk Robustness initiative, the majority of which has already been completed, is a response to the increasing complexity of legal and regulatory requirements. At the same time, this professionalises the taking and monitoring of risks as an integral part of the banking business. Compliance approaches, standards and controls are being standardised and accounted for Group-wide, and the credit organisation as a whole is being made more resilient, both decentrally and centrally.
The financial targets of Strategy 2026
The interplay of the strategic initiatives results in the financial targets under Strategy 2026. By 2026, VP Bank aims to achieve net new money growth of over 4 per cent annually, revenue growth of 4 to 6 per cent annually and a cost/income ratio of below 75 per cent starting in 2026. The Tier 1 Ratio should always be above 20 per cent.
4. 2022 review
Regional development plans
Regional management within VP Bank Group was further strengthened and organised into the three regions of Liechtenstein (incl. BVI), Europe and Asia. Regional management now reports directly to the CEO.
In the important home market of Liechtenstein, which together with VP Bank (BVI) Ltd forms a management region under the leadership of Tobias Wehrli, the wealth planning client services offering was established and a separate department was created for this purpose. Furthermore, the essential management of the Liechtenstein intermediaries business was significantly strengthened with the appointment of Jens Breitung. The first-ever staging of the Vaduz Enjoyment Festival [Genussfestival] (main sponsor, VP Bank) as well as the successful continued support for the Liechtenstein Music Academy and the Ensemble Esparanza were prominent indicators of VP Bank’s presence in the domestic market.
VP Bank (Switzerland) Ltd and VP Bank (Luxembourg) SA were united in terms of management and combined in the Europe region. Mara Harvey, an experienced wealth management expert, has been recruited to lead the new role of CEO VP Bank Europe as well as CEO of VP Bank (Switzerland) Ltd. She took office on 1 January 2023.
With the Asian region, the Singapore and Hong Kong locations were transferred to a regional management structure under the leadership of Pamela Hsu Phua already in summer of 2021. In 2022, the focus was on the first implementation steps of the regional Asia roadmap and the further development of the cooperation with Hywin Wealth Management Co. With the introduction of a Singapore booking platform, which enables clients of Hong Kong intermediaries to post their funds in Singapore, an important milestone was reached for successful future market development.
Investing for Change
VP Bank is listed in the two SIX sustainability indices “SPI ESG” and “SPI ESG Weighted” and is a signatory to the UN Principles for Responsible Investment (PRI) as well as the UN Principles for Responsible Banking (PRB). To reaffirm its Net Zero ambitions, VP Bank has also joined the NetZero Banking Alliance (NZBA). Sustainability criteria have been an integral part of all investment and advisory processes since 2021.
Clients receive transparent information on the sustainabi- lity profile of their investments on the basis of the specially developed VP Bank Sustainability Score, which has been integrated into all investments and product selection processes and is shown on all asset statements. With its unique Sustainability Plus Mandate, VP Bank enables clients to express their own preferences with regard to sustainability and impact issues. In addition, VP Bank received the “Wealth for Good Award” in 2022.
VP Bank reaffirmed the central importance of sustainability by creating the new role of Head Group Sustainability in March and successfully filling it with Dr Lars Kaiser. He drives the implementation of the Sustainability Plan forward, is responsible for project management for the EU Action Plan for Sustainable Finance and represents VP Bank in internal and external specialist and working groups.
With the introduction of a systematic sales management approach in 2022, the necessary structures were created to strengthen market development in a coordinated manner across the regions. The Sales Management team, led by André Rheinberger, is pursuing the objective of refining the focus on clients and sales, as well as increasing the effectiveness and efficiency of sales activities in the regions through standardised processes.
The RM Cockpit, the central tool that provides client advisors with a comprehensive view of their clients. This enables them to provide even more targeted advice and it has been developed further and refined with new functions.
As a client-centric bank, VP Bank is committed to understanding client needs as a continuous end-to-end process and to satisfying those needs in a sustainable manner. For this purpose, a process structure has been implemented in the organisation over the last few years that ensures clear interfaces between the sub-processes. First and foremost, this establishes process owners for client service processes.
In 2022, the focus was on the Client Life Cycle sub-process, in which VP Bank introduced clearly defined improvements in the area of client friendliness. At the same time, the Bank strives continuously to increase efficiency, to improve quality and to minimise risk in this area as well as in all other processes.
An IT system architecture open to products from complementary third-party providers forms the backbone of Strategy 2026, with technology partners playing an important role. In 2022, the IT infrastructure and the infrastructure of the core banking system were migrated successfully to Swisscom. VP Bank thus has an open and flexible core banking system, which makes it possible to develop new client services quickly and nimbly with the integration of third-party services. At the same time, Cyber Security was strengthened and the modernisation of workplaces for all employees was tackled.
As part of Project Athene, concrete measures were rolled out Group-wide in 2022 with a view on efficiency and cost discipline. Among other things, these included the stronger separation of functional areas from areas with responsibility for results, the transfer of Client Solutions to regional responsibilities or the introduction of central procurement management.
VP Bank was added to the token and TT service provider register, making it the first of the three big banks in Liechtenstein able to register ownership claims for real assets digitally on the blockchain and store them as tokens. In 2021, the first art property was successfully tokenised in cooperation with the Music Academy Liechtenstein. Tokenisation met with widespread client interest and VP Bank continued to drive forward with related activities in 2022. Among other things, the service was extended to Asia. This positioning also draws the attention of potential clients to VP Bank, who can then be referred to the Bank’s core business.
As part of the further development of the Financial Steering Framework, VP Bank has embarked on the creation of a comprehensive data analysis platform (data warehouse). In addition to financial management, this will be used in the future for increasingly personalised client care.
Open Wealth Service Platform
Under the leadership of the Chief Transformation Officer, key client processes were identified and Client Journeys developed from them, which are now being tested and refined together with pilot users. Such Client Journeys are, for example, the completely digital client account opening for intermediaries or the automated Lombard loan lending.
Within the framework of the Risk Robustness initiative, several projects were completed that further improved risk management in the areas of compliance and lending, among others.
5. Outlook for 2023
In the third year of the strategy cycle, VP Bank continues to implement its Strategy 2026 of “Seizing opportunities” in a targeted manner and within the framework of the 12 strategic initiatives. After two years of intensive work and the necessary investments for the foundations of a successful future business model as well as the strengthened focus on regional profitable growth, VP Bank is now at the beginning of the Momentum Phase. In so doing, the regional expansion of existing business, the use of scaling to increase efficiency and the selective development of new revenue streams will continue to be accelerated, but on an even more robust platform.
In 2023, the focus will be on the further development and implementation of the regional development plans.
With the launch of the first digital solutions for intermediaries, the catalogue of services for this important client segment will be expanded further and VP Bank’s attractiveness for this market segment will be enhanced significantly.
The introduction of a new advisory tool for advisors to wealthy private clients and the targeted expansion of wealth planning capacities are further important goals in the provision of comprehensive and profile-oriented advice to a sophisticated clientèle. The tool, which will be available at all locations, will enable a flexible and modular expansion of the advisory services offerings.
Processes are reviewed systematically and then developed in relation to future client experiences using an agile approach.
In addition to growth, increasing productivity and digitisation are further focus areas. The examination and realisation of optimisation potential and scaling opportunities therefore continue to be of great importance.
With the opening of the core banking system, an important step towards Open Wealth Services was achieved. In 2023, building on this, the first client services such as completely digital onboarding for clients of intermediaries, automated Lombard lending or the establishment of a FIX interface for intermediaries will be developed, tested on the market and then implemented.
The digital offering for private market investments (ORBIT) was realigned in the current financial year as a result of the changed market situation. For “ORBIT collective”, i.e. private market investment via fund structures, the corresponding offer went live via a platform partner in 2022. With regard to “ORBIT direct”, i.e. investing in the private market via direct exposures, a pilot project will run in the first half of 2023 with a platform partner that has the corresponding access as well as the many years of experience in this asset class.
With the new solutions in the area of tokenisation of real asset values (for example, art), VP Bank is only at the beginning of the numerous opportunities that arise on the basis of blockchain technology in conjunction with the unique regulatory environment for the wealth management business in Liechtenstein. The services will be taken to market systematically and will be expanded further in 2023.