UBS is finally launching its long-awaited home-market response to the advance of neobanks. With its Key4 offering, it is doing things differently than competitors.
After getting the green light from the app stores of Apple and Google, UBS was finally able to launch its purely digital product line in Switzerland and can now challenge the rise of neobanks in its home market.
Among the new brands that UBS applied for were «UBS Key4 banking», «UBS Key4 wealth», and «UBS Key4 business», which have been registered and are now legally protected product names of the bank, as finews.com reported last week.
Product Differentiation
Key4 is designed as a standalone app, although it will be integrated into mobile banking while providing access to UBS's existing digital offerings, and offers the basic account services and a relatively low-cost credit card. Such cards are where neobanks have taken a toll on UBS in the past.
Even so, «we are not pursuing a neobanking strategy» per se, Sabine Magri, Chief Operating Officer of UBS Switzerland, tells finews.com. She goes on to explain that customers can move freely between offers and the product is not designed «to force clients into one channel».
It is in this respect that Key4 differs from digital banking strategies such as the CSX offering from rival Credit Suisse. A modular extension to CSX was announced Thursday, but the strategy there is to move Swiss retail clients who have little interest in advisory services to the digital channel.
New Client Segment
The primary goal of the Key4 offering is to attract a younger customer segment who do their primary banking by cell phone and don't want to have to go into a branch to do so. The other aim is to attract more tech-savvy customers who in the past have not necessarily associated UBS with such digital services.
Existing clients can also pick and choose between Key4 and current offerings. UBS says that around 70 percent of Swiss private clients use digital channels, while only 50 percent actively engage in mobile banking.
Sofa Banking
The services are aimed at both existing and future customers who want to do their banking from the comfort of their sofa at home, so digital onboarding is also available. To help with this, UBS is offering the possibility of opening an account with a biometric passport along, which should be available by summer.
No «Big Bang» at Branches
Key4 has been launched as a Minimum Viable Product (MVP), meaning the bank will continue to build the product out with new offerings. New launches could include offerings in the investment and pension units.
Even with the new digital products, UBS is still committed to a physical presence, and branches remain a cornerstone of being a complete bank. In this regard, there won't be any big bang, but rather an optimization of its physical presence.
