The Swiss bank wants to use the latest digital technology in the fight for wealthy clients. UBS chairman gave a sneak peek into how at a conference in Zurich.
UBS chairman Axel Weber (pictured below) isn't as cynical as his CEO Sergio Ermotti when it comes to the future of banking. He found soothing words when asked about the danger of nearly every third job at UBS vanishing due to digitization and automation, at an event in Zurich.
«We do want to grow and create jobs in new areas,», Weber said on Wednesday at the Swiss Finance Institute's annual meeting.
But Weber also made clear that banking will change fundamentally in the next decade.
Become the Platform
Online platforms such as Amazon or WeChat have surged thanks to an increasingly digital age, as providers bypass traditional middlemen to target clients directly.
«We banks are typical middlemen,» Weber reminded the bankers in the audience. The only chance of survival for the traditional sector? «We have to become the platform ourselves,» the UBS overseer said.
With respect, banks have miles to go until they present a unified platform. Banks have only just begun to digitally link their front- and back-offices end-to-end. Weber signaled that UBS will soon begin another technology push: the bank is preparing to digitize its flagship private bank.
Redundant Sotheby's?
Weber wants use blockchains network to entice super-wealthy clients with a tempting new offering: the distributed ledger technology should make «bankable» physical assets like art, luxury cars or precious gems. The blockchain can track the origin of the assets, which can be difficult value, and ensure safe buying and selling.
«Art collectors could be trading Van Goghs for Monets on the blockchain,» he predicted. UBS is a substantial collector of modern art collection through its acquisition of Paine Webber – should the bank prevail with its vision, traditional auction houses like Sotheby's would be utterly disrupted.
Spy on Clients
Weber is also keen to use artificial intelligence (in German) and big data in the hunt for wealthy clients. Payments, for example, represent the largest pool of consumer information worldwide, he said, but using the valuable data is tricky.
«Clients cannot get the feeling they are being spied on. Otherwise we will very quickly lose trust.»
Trading Patterns
Data in wealth management can serve as a natural addition to advice, he said, which is where artificial intelligence comes in: algorithms can trawl through trading habits for patterns, for example.
«If someone wants to execute a trade which deviates from the usual pattern, the private banker can intervene,» said Weber, helping to mitigate risk
More generally, Weber sees a rosy future for banking: «digitization will mean ever-more complexity. It is our type of expertise to minimize complexity for our clients with advice.»
