Innovation Too big to innovate?

Contrary to popular belief, big banks can innovate quickly. The secret: combine startup thinking with large firm resources.

It is often said that large banks have trouble with innovation: they are too large, too slow, too set in their ways. UBS's Claudius Sutter and Shane Williams beg to differ. Two of the men responsible for the new UBS SmartWealth digital wealth platform (see box), in this interview they explain how they brought a completely new technology and product from idea to launch in less than 18 months. It is an interesting case study of successful speedy innovation in the context of a large organization.

Shane Williams, when you set out to build SmartWealth, what were your priorities? How did you get started?

Williams: Considering today’s environment, we knew we had to move fast. Our first task was to test our initial vision to see if it really seemed feasible. For this we received the equivalent of “seed funding”, a small budget from the UBS Group Innovation Board. We used this to flesh out the user experience, because we felt that would be the key to success. For that we brought an experienced external experience design agency together with our UBS experts, who taught the designers about the processes and complexities of wealth management.

You talk about seed funding. Was the next step a VC pitch?

Williams: In a way it was, though in this case our “investors” were not venture capitalists but the UBS WM Executive Committee, headed by Jürg Zeltner, President Wealth Management. But our challenge was the same: how could we convincingly convey what UBS SmartWealth was to those who had not been working on it as closely as we had? We ended up producing a short video, on a shoestring budget, of what the user experience would be like, and using that as the heart of our presentation. It worked – we got the funding to build the platform. More importantly, having to go through this “pitch” process helped us focus and hone our ideas – among other things because we knew we had to defend them. I would say that being aware that we had to “sell” this idea helped us come up with a better concept in a shorter period of time than we might otherwise have done.

Claudius Sutter, SmartWealth is a very sophisticated, state-of-the-art platform built in a very short period of time. What’s your secret?

Sutter: The key was in identifying and removing the bottlenecks to quick innovation. We examined similar projects in our bank to find out where things got bogged down, and then asked ourselves why. The results were often eye-opening.

Can you give some examples?

Sutter: Sure. Take incentives. All organizations have incentive structures, that’s normal. Our KPIs are there to influence our behavior for the good of the business. But they are by their nature geared to the existing business. When you introduce a new business, as we did, you need to understand how that will alter the incentive dynamics. Or take process. We found for example that the communications bottlenecks between business analysts, who write requirements, and developers, often occurred because they don’t work in the same office. So we insisted on collocation. The whole project, business analysts, UX designers, IT developers, project managers – everyone was in the same building on the same floor. And we introduced a mandatory daily 9 a.m. standup meeting for everyone to air open issues. Simple steps, but with huge acceleratory effect.

So the trick really is behaving like a startup?

Sutter: Not exactly. The environments are very different. In a startup you might have three people developing. In a large firm like ours it could be 150. That makes coordination more difficult, but is a great advantage in terms of resources. What startup wouldn’t love to be able to call on a talent pool like ours? The challenge was not to be a startup, but to be the best possible mix of startup-thinking and big bank capabilities. If you get that right you really can accomplish a lot in a large firm. I think we proved that at UBS SmartWealth, and I would say this experience could be useful for other large institutions looking to do similar projects.

Claudius Sutter is head of Global IPS Synergies at UBS. In addition, he is responsible for UBS SmartWealth.

Shane Williams is co-Head of UBS SmartWealth in UBS Wealth Management.

UBS SmartWealth

UBS SmartWealth is a digital total wealth platform which focuses on investing and wealth planning to help clients achieve their financial goals. Instead of relying on investment algorithms, it channels the collective knowledge of UBS and puts it into a digital advisory solution. UBS SmartWealth is currently available only in the UK for UK domiciled residents.

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