UBS: Caught Up by Reality

Cost Cutting Exercise

The elimination of pet projects and departure of key personnel has to be put into context with the wealth management mega-merger. The bank has been very clear that the reorganization must generate synergies and improve efficiency.

UBS wants to save 100 million Swiss francs ($103 million) through the merger, a target that has become a crucial element for UBS, whose stock price has not made any progress recently.

Evolve Uncertainties

UBS sources report an increased awareness about costs and not just because of wealth management. The bank executives seem to worry about an to the current stock market boom and hope to rein in costs well in advance.

Evolve, the Singapore-based innovation lab, has been all but dissolved, according to observers. Winfried Gutmannsbauer was sent to Asia at the end of 2017 as COO, coordinating innovations in the region.

The question is whether UBS is paring its spending on innovation faced with demands to cut costs in global wealth management.

UBS rejects this notion and says that Evolve hasn’t been shuttered at all (in the picture with Ketan Samani and Juerg Zeltner). The bank adds that Evolve will actually become active for the investment bank and asset management too.

The bank also refers to statements by CEO Sergio Ermotti, who emphasized the importance of new technologies for UBS and the need to fully digitize the bank’s processes.

Innovation Must Pay

Zeltner wanted UBS to be the main innovator of digitization in wealth management. The new bosses, Martin Blessing and Tom Naratil, have other priorities, with a giant merging reorganization and cost cuts.

Reality has somehow caught with the bank. Once, flamboyant visionaries launched projects that were designed to impress the media and the general public – today, more profane aspects such as costs and benefits are more relevant again. An insider told finews.com that UBS managers are demanding more accountability for innovation.