Mr. Ermotti, many believe that technology will completely disrupt the "traditional" role of the banker. Do you agree?
We are going through an acute phase of technological disruption, but this is hardly a new phenomenon. When I started my career we used telex machines to execute FX transactions between banks. Today 95% of the FX transactions that UBS does are completely automated. Anyone my age in our industry has already lived through a great deal of technological change. Today’s disruption will certainly have an impact on all of us in this industry, but it makes sense to keep things in perspective. Rapid change has been a characteristic of our world for a while now.
What aspects of being a banker will technology change the most?
I can’t think of any area of our business that emerging technologies won’t affect in some way. Whether it's blockchain or artificial intelligence or big data, technology is set to influence business models and processes across the board. We will all have to learn new skills, new ways of working, and new ways of thinking about how we best service our clients.
The technologies you just mentioned are most associated with automation. Are we not looking at the fully automated bank, and the end of the banker as a job?
I don’t think we are witnessing the end of banking as a profession. Quite the contrary. But this kind of disruption always creates uncertainty. People in the 18th century worried that the new machines being invented at the time would take all their jobs away. That didn’t happen. Industrialization actually created more jobs, they were just different from the ones people were used to. I think the same will be true for banking, as well as for other industries.
So what will be the role of the banker be in the future?
There will be many different ones, as is the case today. But talking generally, banking has always been a people business and will remain so. This is not just wishful thinking. Despite the growing number of digital channels and capabilities we offer them, some 90% of our wealth management clients tell us they still want to talk to us face-to-face. I don’t find this surprising. Like our health, our wealth is a very personal matter. Despite all the medical resources available on the Internet, we still want to visit our doctor when it comes to actual care. It will be similar in banking. Technology will change how we interact with each other, but it won’t replace the interactions per se.
When talk turns to technology at work, people naturally assume the younger generation has an advantage. Will the bankers of the future all be tech whiz kids?
I believe strongly that a key success factor for a workforce today is diversity in all its aspects: gender diversity, cultural diversity, ethnic diversity, generational diversity, and so on. A heterogeneous group of people makes better decisions than a homogeneous one. Diversity brings in different viewpoints, helps challenge the status quo in healthy ways, fosters creative collaboration, and keeps us from becoming complacent or blind to important developments. It also helps us better understand our client base, which obviously is heterogeneous too. A workforce made up only of the Facebook generation would have similar weaknesses as one made up only of us old-timers who came of age with the telex. It’s when the 20 year-olds share their experiences with the 50 year-olds and vice versa that your organization grows. I am convinced of this.
So generational diversity makes you a better organization?
Among other kinds of diversity, absolutely. And we take this aspect very seriously. Take our Career Comeback program, for example, which helps those in mid-career who have taken significant time off from work to return to our company. The problem mid-career leavers often face is that, in today’s world, a great deal about how we work can change over the course of say five years. With our program we train returners in the new skills they will need, and support them in their transition back to work. That way a lot of experience that might have been lost forever finds its way back into our bank.
On the subject of new ways of working: What are the skills the bankers of the future will have to learn, and how do you as an organization ensure they learn them?
One of the most important skills is flexibility. In a time of change, we need to be able to adapt quickly, to be willing to continually develop ourselves, to be open to new ways of working and thinking. Any organization that wants to stay competitive has to support this. At UBS we invest heavily in education, training and development. We have programs for all roles and all levels, from new joiners to senior leadership. We have our own Business University, an in-house eLearning platform with over 5,000 courses, and partnerships with academia, all with the goal of helping our staff evolve. Other organizations do similar things. The trick is not trying to anticipate exactly what skills you will need in the future, but to put the infrastructure and mindset in place so that you can continuously learn and adapt to whatever new needs arise.
This sounds good for those who already work for you. But banks and other organizations must constantly attract new employees, especially among younger generations. What challenges do you face when it comes to recruiting as a bank these days?
It’s no secret that we in the financial industry still have reputational issues to deal with, and that the industry is not as attractive a career choice as it once was. That said we need to keep things in perspective: UBS still receives a vast number of applications every year, far more than we can hire. But it is probably fair to say that the bright young kids who in the past might have chosen finance first now also look to other industries. And they are looking for different things from their careers: more work-life balance, more flexibility, and also a sense that their work is meaningful, not just for them but also for society.
So how do you address these recruiting issues?
There are different things we can and must do. For one, I think we need to do a better job explaining the role of the financial industry in society at large, and combat this image of bankers as solely profit driven. Finance is a key pillar of our world. The modern financial industry does a great deal of good for society, but that is easily overlooked among the crises and scandals of recent years. That is completely our own fault, and I am by no means saying we should ignore or downplay any of it. I am just saying there is also a case to be made for the positive things a person can do if he or she becomes a banker, and we need to talk about those as well.
In other words, convince people that banking is "cool"? Do you really think that’s possible?
I would put it differently. I think we need to do a better job of humanizing banking. Of personalizing it. Unfortunately today the face of banking is too often one associated with scandal, the rogue trader or rate fixer. But this is or, hopefully, was a tiny, tiny minority of our workforce. The truth is that a global organization like ours is made up of a fascinating, diverse group of intelligent, motivated people from every walk of life and culture. People who work hard every day and care about doing a good job for their clients. Working in a bank like ours means working in an interesting, modern, global environment which offers the chance for a meaningful career that can have a positive impact on society. We need to make this case more clearly.
Finally, there is no denying that banking is an ever-more technologically driven industry. How do you compete with the Apples and the Googles of the world for the young tech talent you are going to need?
We are a bank, not a tech company. But we can and do cooperate, work with and exchange knowledge with tech companies on the business side. I see no reason why we can’t do that culturally as well. When I visit tech companies I am always interested to see how they work. I try to understand what makes them so attractive for young talent, and what they do to achieve the intense levels of creativity and innovation they are famous for. We can certainly learn from those mindsets and ways of working. Not everything will translate into banking. The goal is not to turn UBS into a tech company but rather to learn what we can do in order to be better bankers in this new world.