24 November 2022. On Tuesday, November 22, 2022, the Center for Financial Services Innovation (FSI-HSG) was officially opened at the University of St.Gallen’s SQUARE. At the ceremony, HSG Rector Prof. Dr. Bernhard Ehrenzeller emphasized the financial importance of the cooperation and emphasized: “We are not opening a Credit Suisse research center at HSG today, but an HSG Center for Financial Services Innovation. This was also the common understanding between HSG and Credit Suisse at the launch of the strategic partnership and also applies to all future partners.”
Credit Suisse is the founding partner of FSI-HSG and, with initial funding, makes it possible to start the Center and establish several professorships. Prof. Dr. Axel P. Lehmann, chairman of the Board of Directors of Credit Suisse Group AG, referred to the national significance of the new Center: “It is important to me that Credit Suisse makes a contribution to further strengthen Switzerland as an educational and business location.” In addition, André Helfenstein, CEO of Credit Suisse (Switzerland) AG, said: “Through our partnership with HSG, we want to contribute to the strengthening of Switzerland as a center of education and business. As a financial services provider, we deal intensively with themes such as digitalization, innovation and entrepreneurship. The HSG Center for Financial Services Innovation will provide valuable impetus for academic research on issues that are relevant to Credit Suisse. At the same time, as a strategic partner, we can ensure that this research has a direct practical application. I very much look forward to our collaboration with HSG. Well-educated young people are of key importance to both Switzerland and Credit Suisse.”
Four new areas expand financial research at the HSG
The new institute will be headed by Dr. Tobias Trütsch. His research interests lie in payments and monetary economics, with a particular focus on innovative payment products and individual payment behaviour. Four newly appointed professors presented their areas of expertise during the opening ceremony, and three more professorships will follow:
- Prof. Andrea Barbon, Ph.D., assistant professor of Financial Technology
- Prof. Dr. Nina Reiser, Associate Professor for Financial Market Law
- Prof. Dr. Julian Kölbel, Assistant Professor of Sustainable Finance
- Prof. Tim Meyer, Ph.D., assistant professor of digital ecosystems and platform econometrics
"New digital platforms will soon replace traditional exchanges"
Prof. Andrea Barbon, Ph.D., assistant professor of financial technology, focuses on crowdsourcing in finance. "In my research around fintech, I focus in particular on Big Data to identify the risks for disruption based on big data - but also its opportunities," Barbon said at the beginning of the presentation. "Together with HSG professor Angelo Ranaldo, I am researching the market quality of decentralized exchanges. In doing so, we compare blockchain data with traditional, centralized exchanges for cryptocurrencies. Our results suggest that the new trading platforms based on smart contracts could soon replace traditional exchanges, as they offer lower transaction costs and higher security." In another ongoing research project, Andrea Barbon and Angelo Ranaldo have identified 1000 cases of price spikes in NFT markets, in which the price increased by more than 100% within a few hours. In about half of the cases, these turned out to be bubbles and burst, while in the remaining cases prices stabilized or continued to rise. "Using transaction-level data, we identify a group of experienced investors who can systematically profit from these events," Andrea Barbon explained the research approach. "We find that the active presence of experienced investors during an event increases the likelihood that it is not a bubble. This is consistent with the behavioural finance literature, which assumes that bubbles arise from the participation of less experienced players."
Development of financial market law in Switzerland
Prof. Dr. Nina Reiser LL.M., associate professor of Financial Market Law at FSI-HSG is exploring three questions in particular in her research: What impact does the use of new technologies such as artificial intelligence have on financial market law? What risks do de-centralized finance applications pose and how should they be legally addressed? And what is the relationship between stock corporation law, stock exchange law, and supervisory law, namely, with regard to issues surrounding the corporate governance of banks? "I gain insight into these questions by combining basic research with practical findings from my experience working at the Swiss Financial Market Supervisory Authority FINMA," the researcher explained during the opening ceremony.
How sustainable investments and ESG ratings impact the real economy
"Every dollar invested sustainably should really make the world a better place in the future," said HSG Assistant Professor Julian Kölbel, explaining the goal of his Investor Impact Lab at FSI-HSG. The researcher has obtained an SNSF Starting Grant for his research project on the topic of "Sustainable Investing". With his project, he wants to create a scientific basis for sustainable investments to actually deliver on their great promise. The project is divided into three work areas focusing on sustainable investors' preferences, ESG ratings and measurements, and the impact on the real economy. Kölbel is excited about the "dream combination" of grant and professorship at FSI-HSG: "The SNSF Starting Grant gives me a boost in my work. I have a lot of ideas about what to investigate in the field of sustainable finance. Thanks to the grant, I can now build a team at the new Center to implement these ideas," he says.
New business models thanks to digital transformation
Prof. Dr. Tim Meyer, assistant professor at FSI-HSG, summed up his focus during the event: "The financial sector is currently undergoing an increasing process of digital transformation, in which new digital products and distribution channels are playing an increasingly important role. In my research, I investigate how established companies can successfully respond to such digital transformation processes by building their own digital ecosystems and embedding digital technologies into their business model." The interdisciplinary character of the Center offers him ideal research conditions. In addition to business aspects, he says, financial technology and legal issues are also relevant to his research, and he can discuss these directly with his new colleagues.
Technology and trust: Essential for the Swiss Financial Center
At the end of the opening ceremony, André Helfenstein, CEO Credit Suisse (Schweiz) AG, Dr. Mathias Imbach, CEO Sygnum Bank AG, Dr. Christian Schmid, CEO St.Galler Kantonalbank AG and Dr. Stephan Zwahlen, CEO Maerki Baumann & Co. AG. discussed what effect innovation have in the financial and banking sector. Their discussion was moderated by HSG Prof. Dr. Tereza Tykvová, professor of Private Markets.
Despite differing assessments of the state of technology in the banking sector, for example, it was clear from the round of talks that proximity and close ties with customers remain a constant. With his presentation called "The future has origins", Mathias Imbach outlined his belief that trust will play just as important a role as technology. This could play an important role in maintaining Switzerland as an international banking center.
Further information on the strategic partnership between Credit Suisse and HSG.
Images: University of St.Gallen (HSG) / Hannes Thalmann