UBS chief operating officer Axel Lehmann talks about financial technology: bank jobs “will change completely”


nnnRampage commentary: Compared to the consumer sector, the financial industry is subject to more stringent regulation, so the resistance will be greater change. But the field of financial technology has been in the long-term chain of chain research and development process gradually explored with the regulatory agencies and other modes of harmony. And the chain chain technology change will also bring benefits to the field in this prudent and open attitude. And technological progress will only make up for the lack of manpower, and can not replace the role of human beings in some important areas.n
nnTranslation: Annie_Xun
nAmong the challenges faced by large investment banks, the growth of the financial technology industry or financial technology is the most unique.n
nSince the financial crisis in 2008, financial technology start-up companies flourished, quickly occupied the efforts to deal with the new financial rules and legacy technology system of banking.n
nUnlike the challenges of returning Europe, global growth slowdown and interest rate, it is difficult for banks to predict and quantitatively analyze the impact of financial technology.n
nIt has the potential to revolutionize existing business models, promote productivity and profitability growth, or both.n
nWhile lenders are reluctant to be the next innovator or uneducated Nokia or Kodak, it does not always understand how 100,000 employees are dealing with financial technology threats and opportunities.n
nThe reporter interviewed Axel Lehmann, chief operating officer of UBS, to see how the bank could catch the rapidly changing financial and technological world.n
nBen Moshinsky (BM): Financial Technology Prosperity What are the major threats and opportunities for UBS?n
nnAxel Lehmann (AL): The real change comes from outside the industry, and the main challenges we face today are the same. The discussion of the entire financial science and technology has changed, and we have moved from discussing how the banks will work with other companies as to whether they will change and how banks will change. That’s why most of our technology development work is with financial technology companies.n
nI do not want to be passive because of my vision. So it is no longer just about the technological transformation of the banking sector, but may reorganize everything, occupy our market share of the business model.n
nAnd it’s full of opportunities. From the customer’s point of view, especially from the customer interaction scale, we can provide services and technical point of view, we have these banks at a condescending trend. You can not create anything in the night.n
nSecondly, our legacy infrastructure can be seen as a responsibility, but it is also an asset. For example, the Trump election process is very volatile. Our infrastructure can be upgraded based on volatility, which is what you have to have.n
nSo in this respect, I am very optimistic. More easily expect the consumer industry to change the supervision of the industry, such as excellent or WhatsApp. But when you look at us as a bank, you will immediately find that this is a very strong area of ​​supervision; when you talk about the balance sheet and liquidity, so that the industry is more difficult to change.n
nBut there is no doubt that we still have to remember that we will not be in the supervision of the smaller industry defeated, especially in customer interaction.n
nnBM: What is the most exciting technology of your concern?n
nnAL: I really believe that in four to eight years, all the problems of robots and artificial intelligence will fundamentally change the banking industry. As a bank, we understand that our business is about data. These technologies have the potential to fundamentally change the way they operate, including a more sensible face to customers, understanding what products we offer, and so on. It was very exciting.n
nnBM: How will that affect the number of employees in large banks? Does the banker need new skills?n
nnAL: I think the problem is always the same, you can understand people want to understand the potential job to reduce the desire. 50 years ago, UBS first introduced in Europe when the ATM, we are in the. At that time the media predicted that it would eliminate all the bank counter posts and branch network. Now history tells us that this did not happen. In fact, the branch staff began to get different forms of customer service opportunities, I think the banking industry will now be the same thing on a larger scale.n
nPosition and job requirements will change completely. I firmly believe that technology will support and make up for more human abilities. Of course, if I had a retail fund with no investment funds, I might decide to finish it completely through the machine; but if I had seven-digit funds, I would need people to provide professional advice, so the important posts of the consultants would never disappear. The banking industry will continue to be human business.n
nSo I do not want to predict whether we will increase or reduce the post. We will have different positions, these people’s skill level will be different. Of course, may eliminate some of the process. The more the use of robots and automation, the more the replacement part of the manpower now complete the process. However, what I think is likely to happen is that we will see a significant increase in productivity and efficiency.n
nnBM: Will that be much profitability drive?n
nnAL: Through technological or regulatory progress, this productivity will drive profitability, or absorb any additional costs. These developments will be used again in other places, such as improving civil rights or handling more regulation.n
nnBM: UBS how many tens of thousands of employees such as the bank how to interact with a handful of financial technology start-ups? What kind of cultural adjustments do you need to make?n
nnAL: dealing with financial technology companies is a need for cultural transformation, you also hope that the local people can participate in innovation. UBS has a systematic process of communicating with financial technology companies. For example, we have a range of projects, including the Future of Finance Challenge. The competition is currently under way to provide a platform for start-up companies and growth companies to provide their own ideas to enable UBS to support its creative acceleration. That’s what we’re doing. We really want to take advantage of the rapid development of the project but a good idea, you can upgrade and apply to the organization’s software.n
nnBM: Are the competition for these projects intense? How do you make sure to invest enough time and money?n
nnAL: UBS has a net savings target of 2.1 billion Swiss francs, but our IT investment has broken the record, accounting for 10% of revenue. We will not sacrifice long-term development for quarterly earnings. Secondly, if you look at our overall positioning, will find its uniqueness, it also gave me confidence. We are the global leader in wealth management and the core of digital investment. We wisely invest in dollars per dollar will help us to strengthen civil rights.n
nYou look at the investment bank, their core strength is consulting, foreign exchange transactions, cash investment market. The electronic trading platform in these businesses is leading the market, and we guarantee that we focus on these areas of our own competitive advantage. We are Switzerland’s premier integrated bank, and we also want to consolidate the position of our digital bank here.n
nnBM: How do you see the block chain in the financial industry?n
nnAL: I personally want to say that other industries may be more suitable for the rapid use of block chain technology, because the financial industry is very complex. Details can not afford to consider. In this industry, you may see some private applications for block chain technology, but I think the benefits need to be proven. The certainty of all regulatory and legal contracts will take some time, about five to ten years. So a lot to be achieved.n
nnBM: How do you see encryption money growth, especially ICO, is it a bubble?n
nnAL: I think the encrypted currency is a phenomenon, but there is no final conclusion. Is it cash or asset class? ICO is the same.n
nYou know that you are always paying close attention to these in the financial industry, such as P2P lending. But you always need to understand the entire loan cycle in order to really understand what this thing is. Even when the bank struggled out of the crisis, there are thousands of smart people trying to manage the risk of loans but the wrong way. I’m not sure if there will be better alternatives coming from the crisis.n
nWe see the new market interaction, the sun still shines. But when you storm struck, will be washed clean up everything, so I am very comfortable. Of course we always have to monitor what happened. But I will not give these enterprises at this time to provide a huge economic opportunity.n
nnBM: whether the rapid growth of financial technology, regulatory institutions to keep up? Where is the risk?n
nnAL: We must be careful in the future. Regulatory should not stifle innovation. Banks should welcome regulators such as the PRA or Singapore MAS to open the door to financial technology and allow companies to better explore the potential changes in business models. Our request is a fair environment.n
nRegulation must gradually shift to a more functional model. At present if I was a bank, it was regulated by a company like that. If I were an insurance company, it would be like an insurance company. However, some of the lending platforms are partially regulated, although the customer appears to be the same supervised product. In order to avoid regulatory arbitrage, regulators must take a more functional perspective.n

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