The coronavirus pandemic has boosted the organisation's investment data aggregation needs rather than reduced them. Credit Suisse, which is a cornerstone client of Canopy, appears to have made an astute decision.

Singapore-based data aggregator Canopy became something of an outlier in the rapidly crowding wealth-tech space when its cornerstone client, Credit Suisse, took a 10 per cent stake in the business in 2017.

The Swiss private banking behemoth, alongside prolific Asian venture funds LionRock Capital and Dymon Ventures, was betting that clients wanted an aggregate view of their investments which advisors could not, would not or did not have to provide. 

“Our call that private banks would not have to provide APIs [software intermediaries that allow the bank’s applications to talk to external ones] was a good one,” says Canopy founder Tanmai Sharma. Its flagship product, Extract, provides the missing link between proprietary data and investment analytics across asset classes, currencies or indeed advisors. 

Coronavirus-led volatility over the last quarter, responsible for the largest daily price swings in major indices since the crash of 1929, may have worked for rather than against the business. “COVID-19 hasn’t had a negative impact on our business at all. In fact, lockdown has been kind to us. Our business is subscription based so contracts tend to be longer term; it’s cloud-based and we don't have servers in the office, so it lends itself quite naturally to working from home,” said Sharma. 

“From the beginning of March both logins and customer queries have increased significantly because a larger number of people are actively monitoring their portfolios. Initiatives such as the MAS Digital Acceleration Grant whereby the Singapore government funds up to 80 per cent of a registered financial institutions’ digital expenses have also helped,” said Sharma. Investors must share his optimism. Canopy is expected to announce another round of funding from existing backers in the coming week. “Revenues have doubled from last year and we are hoping to break even in the first quarter of 2021,” said Sharma. 

Singapore is the company’s home market - Sharma and the majority of his team of 45 are based there, as is Bank of Singapore, one of its largest clients - but conditions in other regions have been less than ideal. Hong Kong for one, has had more instability in the last year than in any time since the handover in 1997. “We have had strong business out of Hong Kong and it is a very important centre for us,” said Sharma. “We continue to pitch to wealth managers in Hong Kong and I have not noticed any real change from a business perspective.”

Switzerland, where Canopy planted its flag in late 2018 when it appointed Sinan Biren to lead business development, is a market with completely different dynamics from Asia,” said Biren, who runs the company’s European operations from Zug, also known as Switzerland’s Silicon Valley. “Swiss private banks are changing at a faster rate than they have before. We may occasionally come across bankers at the smaller Swiss banks who say they only meet clients once a year and hold 90 per cent of client assets in discretionary mandates. By and large though, Swiss banks acknowledge that they are likely to be one of four or five advisors clients turn to and the opportunity for them to distinguish themselves lies in being able to provide holistic advice.”

“Stylistic differences are actually less stark than is widely assumed,” said Sharma, “but the gender difference is very obvious.” 

“For example, many of the family offices we deal with in Asia are run by the wealth owner’s daughters,” said Biren. “In Switzerland, they are almost all exclusively run by the sons.” 

Is this younger generation of clients more amenable to a conversation about data aggregation? 

“Third-generation clients are far more focused on data than they are on relationship managers,” Sharma said. “This generation of wealth inheritors - who are an increasingly important demographic for private banks - want different perspectives on their portfolios. For example, they may be interested in an ESG overlay to their investments, which can be provided quite easily using Canopy.” 

Slicing and dicing data in different ways either to provide new insights or to include new asset classes, are important means for the company to achieve scale. “We can take what we do for equities or fixed income and stretch it across asset classes,” said Sharma. “We signed on our first crypto-customer who is using Canopy to monitor his position. Because crypto markets trade 24X7 and our client is a crypto-trader who makes multiple trades in a day, getting an accurate perspective on P&L and risk is crucial.”