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How to shape the future of an industry – the UBS benchmark

Hazjier Pourkhalkhali, Global Head of Strategy, Optimizely

The future of any industry is determined by two types of companies – the disruptors and the disruptees.

The makeup of these organisations will come as no surprise to anyone, yet if entire industries are to truly move forward, the latter cannot afford to be defined by this label. Traditional, established players can still be responsive to customer needs and deliver a brilliant user experience and they don’t have to reinvent the wheel to do so. This is exactly where UBS has led the way in the field of investment banking.

By channelling the principles of the likes of Netflix and Spotify, UBS has been able to deliver a personalised approach to trading. Its use of recommendation algorithms allows employees to suggest trades to hedge fund and asset management clients, signalling a sea change in the way the sector operates. If the principles for this functional change are applied more broadly across the industry, this groundbreaking move could have a huge impact on the future of investment banking. Yet, this new mindset shouldn’t just be confined to a certain portion of the industry – the potential to revolutionise the way in which the whole financial services sector treats the customer experience is immense.

From high touch to high tech

To this day, investment banks handle their biggest clients through a resource-intensive, high touch model. The advances in algorithmic trading platforms have so far not dissuaded many from taking this approach. Yet, what UBS has recognised, and many of its competitors will understand, is that these relationships will not be sustainable for much longer. The attractive proposition of ease and speed of use and higher returns, will turn heads, and when it does so for one organisation, many more will have to follow suit. The existing model is simply too slow when lined up against algorithmic trading and results are far too dependent on the capabilities of one employee. In a world where customer expectations increase at an exponential rate, the only answer is to follow in the footsteps of UBS’ project.

Total commitment

Any financial services business looking to implement a similar change in approach should note how fully committed the company has been in its digitalisation efforts. Innovation and digitalisation have been made key strategic priorities and the rhetoric has been supported by positive action. It became the first bank to set up an innovation lab in Canary Wharf’s own L39, and this has been followed by similar operations internationally. This dedication to understanding exactly what customers want and acting upon it is already bearing fruit.

Dirk Klee, until recently the Chief Operating Officer at UBS Wealth Management, is in no doubt as to how important using this technology to keep the finger on the pulse of customer demand is, when it comes to retaining and building a competitive advantage in the market. He has stated that, “The client experience is being increasingly driven by what clients see in companies like Apple or Amazon.” The goalposts have shifted for every single business, regardless of size and heritage.

A new dynamic

If businesses are to do more than just survive, they will have to mirror this attitude. To borrow a phrase from Forrester, they have to become customer-obsessed. This means going beyond traditional customer satisfaction surveys at specific moments in time over the year – they have to be able to change and adapt to needs as they evolve. What is more, they need to act upon them. In exactly the same manner as you would expect Netflix to recommend a new series tailored to your preferences, advice and consultancy is expected to be driven at speed by the latest algorithms, in the financial services industry. This is not just a responsibility for the more typically disruptive companies, fresh to the market – this approach has to apply to everyone.