SAGE Group SA: The Front Office revolution bringing investors and fund managers closer

In an interview with Geneva Business News, Jean-Luc Freymond, the CEO and Chairman of SAGE Group SA – a leading Swiss company in financial management technology – speaks of the recent accolades awarded to the company’s products as well as his vision and the means by which he intends to bring it to fruition.

The successive crises which have affected the banking and finance industry have resulted in both investors and fund managers seeking for tools which are simple, yet reliable to manage their portfolios. Also sought for, in addition to portfolio management, is an improvement in client – fund manager relations resulting from improved understanding and explanation of financial products.

SAGE Group SA is dedicated to revolutionizing the front office interface between investors and financial establishments, a goal which forms the very core of its vision. It has created two product lines of which the first, Prospero, provides software used for wealth management, institutional management and the management of funds (including hedge funds).

Prospero provides solutions for each part of its niche market including independent wealth managers, established banks and family offices. In recent months, Prospero has received several accolades particularly from a number of renowned independent stakeholders such as IBS Intelligence and the AITE Group.

The more recent product, BlackSwan, is a platform which makes it possible for investors and managers to optimize portfolio returns specifically through loss reduction during extreme market conditions such as the recession. In spite of its elaborate internal mathematical model, BlackSwan is a platform which is both simple and easy to understand and which makes it possible for the user to effectively distribute their investment between different available asset groups – a function which should have required 20 man-years to achieve – a considerable head start on the competition.

It has just been recognized by Datamonitor as 2013’s new trend in the area of client – fund manager relations. A notable key function of the product is that it increases the quality of communication during business meetings between the two parties as well as improving the understanding and the management of risks. SAGE Group SA is a promising pioneering firm in a sector in which young investors are interested in obtaining an improved understanding of the contents of their portfolios unlike a significant proportion of mature investors.

Products and comparative advantages: Practical risk management solutions

Geneva Business News: What are your views on the accolades awarded to your products Prospero and BlackSwan? Do you consider them to be the peak of achievement or a source of additional motivation?

Jean-Luc Freymond: For a firm like SAGE Group SA that is constantly in search of innovation, the recognition of independent stakeholders such as IBS, AITE and Datamonitor is very important particularly in light of the fact that they are focused on the future and are good observers of key trends! We view these accolades as recognition of the accuracy of our vision and the effectiveness with which it is implemented. It is a confirmation of the fact that we provide real added value to the industry both in terms of innovation and in terms of the relationships we have with our clients. It is also recognition of the work carried out by our staff. These accolades indeed provide additional motivation to innovate and maintain our leadership.

SAGE has made a winning connection between the 3 factors which can enable banking establishments to stand out from among the competition. These are: The front office, products and order processing (back office). 

Geneva Business News: The ‘flexibility’ of your product and rapid investment returns are often mentioned. Could you provide us with factual examples of these?

Jean-Luc Freymond: Banking establishments prefer to avoid lengthy and costly projects on which investment returns are not guaranteed. Rapidity on investment returns has become an important criterion by which projects are selected and by which their success is measured, particularly in the present time. Investment returns are measured in terms of business volume growth or cost rationalization.
We have thus modified our products in order to respond to these needs. The preconfigured solution we provide incorporates best practices and can be utilized promptly thus enabling our clients to reach their objectives just as rapidly.
For example, we installed our solutions in two banks within the space of six months: the first installation was completed within three months and the second within four months.
SAGE Group SA has made a winning connection between the 3 factors which can enable banking establishments to stand out from among the competition. These are: The (1) front office, (2) products and (3) order processing (back office). Without a knowledge of the product by the front office, an available comprehension of products or the prompt processing of orders according to clients’ specifications; it would be difficult for an organization to experience an increase in business figures. Our products provide this supplement of flexibility in the value creation chain – flexibility which could become a comparative advantage for a financial establishment.

 
Geneva Business News: SAGE Group SA is a pioneering organization in the area of Cloud solutions for financial establishments. Such services would not have been considered due to security concerns if not for the financial convenience of this particular segment of the market. Is boldness or are gadgets required to stand out from among the competition?

Jean-Luc Freymond: Our aim was to provide financial establishments, family offices and independent fund managers with a small-sized first class tool. These stakeholders are not necessarily interested in having an important computing service during the launch of their activities but wish to access our Cloud services almost immediately after becoming our clients. In addition, our robust systems which possess a high level of security provide a first class data processing service to our clients that they would certainly not have been able to install within such a short period of time or at so little cost. It is true on the other hand, that our key clients – who besides, are not our target for this service – initially displayed a certain reticence. However we are unafraid of innovation.

“BlackSwan was created to assist investors and fund managers in managing risks in volatile markets… using macroeconomic data – such as levels of unemployment, petrol prices and growth – that everyone can understand. “

Geneva Business News: Your other product, the BlackSwan, which is also a part of the Prospero line is slightly less well known.

Jean-Luc Freymond: BlackSwan is a very promising product. Datamonitor has also confirmed that fact. BlackSwan was created to assist investors and fund managers in managing risks in volatile markets as has been the case for some years. Using macroeconomic data that the client can understand – such as levels of unemployment, petrol prices and growth – BlackSwan makes it possible for the investor to understand the evolution of their portfolio in relation to these parameters and thus participate in managing risks linked to it. It is in this sense that BlackSwan improves the quality of communication between the investor and the fund manager. These discussions become truly interactive because both partners are able to use common parameters. It is a minute revolution within the banking sector long accustomed to using risk management mathematical models hitherto understood by a handful of employees. BlackSwan is a solid guarantee in improving risk management.

 
Geneva Business News: Real time trading risks are often mentioned. The BlackSwan platform must evidently be considered in the issue of trading, does it not however somewhat contribute to the impersonalization of the financial process?

Jean-Luc Freymond: Not at all! BlackSwan is a long term management tool which makes it possible to optimize portfolio returns based on macroeconomic data which is essentially a long term strategy compared to real time trading.

 
Geneva Business News: What are the comparative advantages that you have at present?
Jean-Luc Freymond: The fact that our service is preconfigured makes it possible for it to be installed within a short period of time. Additionally, our partnerships with technology and data providers make it possible for us to conceal the true extent of the complexity of our solutions from our clients so that they are perceived as being simple and easy to set up. Our services integrate all the necessary licences thus saving the client the trouble of having to negotiate with each provider. Our strategy for Front Office improvement has made it possible for us to anticipate the need for investors and managers to communicate through the use of parameters they can both understand – a leadership in innovation which has been recognised as mentioned earlier. Finally, few stakeholders can claim to have our knowledge of this market in the 3 key regions for future growth in the financial sector, namely: Asia, the Middle East and Europe. All these elements contribute to the uniqueness of our service.

Strategy for growth: Innovation and lead markets

“Our comparative advantages are threefold: the simplicity of our service due to the fact that it is preconfigured, innovation, and our unique understanding of the market on a global scale.”

Geneva Business News: SAGE Group SA is currently present in Europe, the Middle East and Asia. You have 2 product lines. Will they be sufficient to ensure sustainable growth? What are your growth levers for the future?
Jean-Luc Freymond: The 3 regions have a potential for growth that is already absolutely phenomenal. This industry is experiencing a period of profound change from pressure for regulatory hypertrophy, pressure on offshore products, transfer of wealth to the East, and a younger generation of investors whose relationships with their bankers are completely different from those maintained by the older generation with theirs. This dynamic gives rise to new opportunities and motivates us to further concentrate on our niche and to endeavour to understand these changes in order to provide solutions which remain innovative and capable of ensuring the prosperity of our clients and of ours as a result. That is our strategy.

 
Geneva Business News: You seem to be avoiding the American market. Is this due to a desire to concentrate on markets in which you are already influential or because you wish to avoid problems even though you are not a bank?
Jean-Luc Freymond: We are not exposed to the same risks as banks. As I have already stated, the potential of the markets we are currently concentrating on is enormous and we want to avoid spreading ourselves too thin and losing our closeness with our clients as a result.

“We intend to equip BlackSwan with features which make it possible to measure risks more effectively for non-banking asset groups such as real estate and private equity.”

Geneva Business News: What future developments do you envisage for your products?

Jean-Luc Freymond: We are working on a development which optimizes the presentation layer for touch screens for both Prospero and BlackSwan. Our software already operates on these screens but we wish to improve their ergonomy. Specifically for BlackSwan, we intend to add features which make it possible to measure risks more effectively for non-banking asset groups such as real estate and private equity. An example of risk is risk linked to a lack of liquidity. Still within the perspective of improving the relationships between investors and their banks, we intend to equip BlackSwan with search results on long term and sustainable investments once they have come to maturity.

 
Geneva Business News: Where do you see yourselves in 5 years?

Jean-Luc Freymond: In 5 years, I envisage a business experiencing significant growth which will have improved its share of the market and the ergonomy of its products. I also envisage a key part of our revenue coming from an Internet self-service feature which makes it possible for investors to register with us online and gain access to our services without having to contact our staff first of all. That is going to be our new distribution channel.

 
Geneva Business News: How does an organization like SAGE Group SA manage its human capital, namely, its staff? How are they recruited and what do you do to keep them?

Jean-Luc Freymond: Our employees are our most important asset and we are proud of our very low staff turnover which is due to a combination of 2 factors: the importance we place on sharing our values from the outset and the creation of a variety of motivating challenges throughout the careers of our employees.

An Entrepreneur in search of key trends and sources of added value.

“In five years, I envisage … a key part of our revenue coming from an Internet self-service feature.”

Geneva Business News: You possess a background which although unusual is no less original: Business management, law and information systems. What have been the keys to your ability to adapt to these different areas?

Jean-Luc Freymond: When I look at my experience, the single factor which has always motivated me is the desire to improve the area within which I function. In order to improve my ability to adapt and my quest for added value, it is necessary for me to analyze and understand key trends, hence the significant amount of time I dedicate to reading and the perfecting of my professional experience.

Another tool which I have found to be of great importance is the Entrepreneurs’ Organization which I am a member of and which provides a unique framework for the sharing of experience. This organization offers a significant amount of continuous training. It is as a result of it that I completed a Master’s programme at the Massachusetts Institute of Technology (MIT).

 
Geneva Business News: Several executives have habits to which they are accustomed such as rising at 5 o’ clock daily to engage in physical exercise. What about you? What do you do to ‘unwind?’

Jean-Luc Freymond: There are two things I do to unwind. First of all, I dedicate one hour between the hours of six and seven a.m. to sports activities, which enables me to begin the day in a dynamic and motivated manner. Secondly, I also follow a certain lifestyle which includes managing the transition between my professional and private life while commuting between my home and my place of work. When at the workplace, I concentrate on work related issues and concentrate completely on my family when with them.

Profile of Jean-Luc Freymond

Prior to becoming the CEO and Chairman of SAGE Group SA, Jean-Luc Freymond was one of the principal architects of Prospero, the banking and financial management software suite developed by the organization. Prior to joining SAGE, Jean-Luc worked for UBS and already possessed more than 14 years of experience in system development and in project management in the banking sector. He was also responsible for the successful completion of several large scale projects through the effective management of teams composed of both developers and analysts.

He shares his experience by giving banking technology courses at the University of Lausanne and by participating in expert forums and webinars in this area. He is also an active member of the Entrepreneurs’ Organization.

Bilingual in French and English, Jean-Luc possesses a BA in Management and a postgraduate diploma in European Law, both obtained from the University of Lausanne. He also possesses a Masters Degree in Entrepreneurship obtained from the Massachusetts Institute of Technology (MIT).

 
*This article was originally published in French by Constant Gbaguidi for Geneva Business News on 25th June 2013.