Spotlight on IG Group: Swiss CEO Fouad Bajjali meets FinanceFeeds in Geneva

To boldly go where only a few have gone before is not the norm for the retail FX industry, as many companies tend to follow the lead of others and at best find it hard to define a value proposition, and at worst, become an also-ran.

For a large, well established, publicly listed company with a top drawer reputation such as IG Group Holdings plc (LON:IGG) to go to the lengths of establishing itself as a Swiss bank, in Geneva’s investment banking heartlands, among large, well known wealth management firms as well as domestic rivals Swissquote and Dukascopy Bank was a brave move.

Or was it a sensible and very forward-thinking move?

The latter is most certainly the case as IG Bank SA will be one year old next week.

FinanceFeeds’ Andrew Saks-McLeod today met with IG Bank SA CEO Fouad Bajjali at the company’s ultra-modern, plate glass offices on the shore of Lake Geneva to look at the year gone by, and at the promising future which IG Bank looks forward to.

Sophisticated and composed Mr. Bajjali began by taking a look back at what exactly went into establishing a new Swiss banking entity.

“On October 6 last year, we went live, which was one month after receiving the Swiss banking license from FINMA on September 5, 2014. Once we received the license, we took a month to finalize some administrative matters, before going live” said Mr. Bajjali.

The company specifically wanted to begin its foray into the otherwise very traditional Swiss banking environment by marking itself out with a very modern outlook. This is reflected in the company’s offices which would not be out of place in Singapore or Hong Kong, and are located in a building which is home to several Geneva fashion outfits and the Rooftop 42 bar which is a well known haunt for many of Switzerland’s top financial executives.

As far as establishing a new entity among the mainstays of Switzerland’s world renowned financial sector is concerned; Mr. Bajjali made the most accurate point that “Due to there only being a handful of competitors in our particular sector of the industry in Geneva, most of which are high end companies, it is actually easier to understand what the industry is about.”

“Switzerland requires that all entities which operate within the FX industry, provide FX technology or operate as an electronic brokerage, are banks, and that there should be no variable factors which other companies face all the time in other parts of Europe. For example, in Switzerland, there are no companies which operate here by passporting from elsewhere under the MiFID rules which allow it, because Switzerland is not an EU member, and also does not allow any firm to operate without being a Swiss bank. All of the FX companies in Switzerland are fully regulated by swiss banking licenses” he said.

Switzerland sells security

Mr. Bajjali explained that one of the most important points of a Swiss brokerage’s raison d’etre is client security.

As a nation, Switzerland sells security, and because of that, going through the scrutiny and procedure which is required in order to obtain a banking license, and then successfully be granted such a license speaks volumes about the company’s value proposition.

Mr. Bajjali is quite certain of the credentials that his company offers, and rightly so. IG Group’s London operations is a bastion of commercial success, led by now retired Tim Howkins, who spent several years as CEO and can be credited with steering the company with millimetric precision.

As CEO of IG Bank SA, which is a wholly owned subsidiary of IG Group PLC, Mr. Bajjali is certain that the extension of the company into Switzerland was a natural progression for the firm.

As far as ownership is concerned, IG Group is a British company but IG Bank is a private bank, therefore shareholders in IG Group are only interested in the performance of the entire group.

Fouad Bajjali – International IG Group veteran

Fouad Bajjali has been with IG Group for 9 years, in various senior management positions across many international regions which are key to the FX industry.

“I was in London for just over 1 year, and then spent another year in Singapore in 2008, before moving to Madrid in January 2009, where I stayed until January 2014. At that point it was necessary for me to move to Geneva to conduct the process of working toward the company obtaining its Swiss banking license” said Mr. Bajjali.

“During that year, I had to get all operations and office planned, submit it to FINMA and then they inspect everything according to the plans that are submitted. We had to make a full plan of every single aspect of the proposed business, and then submit the proposal, build the entire operations according to that as well as the stipulations in the Swiss banking code of practice, and then be fully inspected by FINMA to ensure that we built it according to our proposal and their rules. This includes operational factors, including things such as making sure staff hired are for the purposes stated.”

“Technology is also a factor” said Mr. Bajjali. All of the Swiss FX companies have their own system as Switzerland has strict rulings on this matter, and the entire IT solution must be properly ringfenced.”

Any big surprises?

When asked if there were any surprises, or if an innovative idea sprung to mind that had to be implemented immediately, Mr. Bajjali calmly stated “We began the procedure a bit over a year before going live, therefore had a long time to speak to the staff and organize everything properly.”

“Switzerland is a country which is heavily linked with global finance, however we are here primarily to focus on Swiss clients and Swiss residence. Longevity is what people look for in Swiss companies and we did not have that here. Therefore, we committed substantial resources to building the brand, our product offering, remaining extremely solid and reliable whilst retaining our technologically advanced look. Getting that across to the public was vital” he said.

Fintech is a buzzword in once traditional Switzerland

“Banking is changing” said Mr. Bajjali. “Fintech is a buzzword over here in Switzerland and we are different to standard Swiss entities and are happy to show that. We hired a cross section of staff from the traditional Swiss banking industry, some have worked in the Swiss finance industry, and some from the FX indsutry here in Switzerland so we know how to cater to the clients and build a brand” enthused Mr. Bajjali.

Mr. Bajjali elaborated on the subject of branding, stating that IG Bank is doing a good job of this vital aspect, and is actually conducting local services such as trading analysis in Switzerland, to compliment that offered in London.

Tim Howkins, London’s involvement and what’s the best method?

Mr. Bajjali noted that there was a great deal of autonomy in terms of the operational structure of IG Bank during its initial period. Former IG Group CEO Tim Howkins was involved with regular catchups, because there was a startup investment involved, but was able to allow the division to flourish on its own. Indeed, Mr. Howkins can be credited with the legacy of having been one of the FX industry’s most competent CEOs.

Therefore, being able to commit to establishing what is effectively a startup which nestles between the age-old giants which dominate Lake Geneva’s shoreline, and allow it the ability to grow as it has done so far is an achievement which Mr. Howkins will no doubt view as the final in a long list.

“Establishing a startup as a Swiss bank is interesting” said Mr. Bajjali.

He explained that once, a financial journalist in Geneva asked “More traditional Swiss banks closing than opening, so why are you here?” Mr. Bajjali’s opinion is that the company’s product specification and range of services is totally different to traditional Swiss banks, therefore this is a good advantage.

Conferences are passe in many places, but Switzerland likes to get together

When asked if the company’s method of reaching potential customers and partners involves attending events, a matter which FinanceFeeds considers very much an obsolete ideology, Mr. Bajjali took a pragmatic view. “I like to tick all the boxes, I dont like to write off any methods” he said.

“With regard to the value of FX industry conferences, I am similar to your thought process on that matter and I am no big fan of them, however Switzerland is conference heavy, and journalists pick up alot from the conferences. I may have agreed with you on other regions but not Switzerland.

“Online push notifications work in certain cultures, however this does in others.”

Here in Switzerland, Mr. Bajjali confirmed that the customers require a high touch approach, and that brokers need to spend a lot of time with the customer.

“This is one of the reasons that we hire people locally” he said. “It is cultural and the key staff need to understand how Swiss customers require contact with the firm. We need to give the client personal service and this means spending alot of time with them.”

“It is still very early to have a clear idea on the concept of retention but I like to think that investing in spending a long time with each customer will ensure long term client relationships and therefore reduce the difficulties of retention” he said.

“Working in Spain was different. There is a lot of passporting from other EU countries. Also, account opening is much easier in other parts of Europe compare to in Switzerland. The Swiss way is much harder. There is a sense of commitment by a customer when they go through it, as a customer will often not begin this process if they are not serious” he said.

Fluent in German, Spanish and English, but not a fan of the cold weather in London!

As far as liquidity is concerned, IG Bank in Switzerland nets everything off with IG Group in London, therefore the liquidity and order execution process is identical to that of a customer of the firm’s London entity.

So who is Fouad Bajjali? He came straight out of university in London, completed a couple of internships, looked at investment banks, and then came across IG Group.

Initially, he was hired on the trading desk. “I speak German fluently as my mother is from Germany, so I worked on the German desk” he said.

As far as choosing FX as a career is concerned, Mr. Bajjali enthusiastically explained that “There was something about IG Group that felt more interesting than Morgan Stanley. At that time, Morgan Stanley offered me a job in bond sales for the Spanish market, having grown up in Spain and speaking Spanish fluently ” he said.

“I got the job offer for both roles, and then went with the gut feeling. After the interview at IG Group, something about the company seemed exciting, and on November 14, 2006 I joined the firm and in hindisght it was the right thing to do!”

“You’re asking me what is the best and worst thing about working in London? Well, I I lived in London for 6 years but only worked there for one year and I can say that the worst aspect is transitioning from university and internships to a full time job and get the tube at 6.00 am and arrive in the dark and leave in the dark. Growing up by a beach in Southern Spain, this was hard to get used to!”

“London is very different as a student compared to what it is like as a professional!” concluded Mr. Bajjali.