While technology continued to evolve rapidly in 2017, what stood out for me most this year were the strides we made in what we might call the "human" side of digital disruption in banking. This is an important, and welcome, development.
For example, one of the great challenges we face within the industry is the dizzying pace of change. At UBS this year – and I suspect also at many of our peers – you had the sense that internal colleagues had for the first time come to understand and accept our innovation processes almost as something "normal".
Taking the mystery out of change
In our case this was helped by the maturation, and higher visibility, of those processes. Efforts like our digital factory in Zurich or the different cross-divisional development programs that we have set up brought a higher awareness and understanding about the changes that we face. I think it is a significant step forward.
Something similar went on in the realm of artificial intelligence. While it will take time before we see truly intelligent automation in banks, at UBS we successfully established robotics and machine learning components internally in many areas. Thanks to these early successes colleagues can get a feel for what an augmented future might look like. This helps "demystify" digital transformation within the bank, which is very helpful too.
Transparency on innovation processes has helped demystify digital transformation. That is very helpful.
Towards a fully digital economy
There were comparable developments on the client side. While the incredible and unforeseen explosion of value in cryptocurrencies like bitcoin may or may not be sustainable, this was certainly the year that people began to accept the idea of fully digital assets. That is an important conceptual step as we move towards the digital economy.
This was the year that people began to accept the idea of fully digital assets.
Nor was it just cryptocurrencies. As we explored in our “Beyond Money” UBS Future of Finance Forum, great strides were made this year in digitizing existing tangible and intangible assets. This too raised awareness of the new possibilities that go along with digitalization.
Exploring and collaborating on technology
Looking to 2018, I think the fruitful collaboration that we have seen among stakeholders in our industry when it comes to digital transformation will intensify. We as banks will continue working with startups and larger Fintech vendors, and the discussions with regulators will continue. This accelerates our abilities to innovate the industry.
We will also see a continuing exploration of and experimentation with new technologies. While this has been going on for some time, I think next year we will begin to have more intense discussions about technology not just as a means of attaining more efficiency in existing processes, but as a way to enable new kinds of business models. This too is an indication of how the digital transformation process in banking is maturing.
Security and trust
Of the many important technological trends in banking, I think the following are particularly noteworthy for the coming year:
- Digital Identity. 2018 will be a year where banks focus more strongly on digital identity, in close collaboration with other identity stakeholders like government agencies and peer financial institutions.
- Security/Trust. Cyber security may be the most important challenge we face in digital transformation. Banks will continue to focus on security of their own systems. As trusted institutions, they will also increasingly look at ways they can provide services around data, helping clients secure and protect their digital assets.
- Client interaction. Banks will continue to actively explore ways we can increase and improve client interactions, whether through things like voice channels and digital channels like messaging, or by "enhancing" our client advisors or providing clients better tools to do their own research.
Cyber security may be the most important challenge we face in digital transformation.
New skills for a new world
If they are going to master digital transformation, banks of course will need the right staff. For that reason, I think skills and education will remain an important theme.
Banks will continue to think about what types of technological skills they will need to build the bank of the future. One personal passion for me is how we can get more women into tech jobs and foster diverse teams, and I look forward to ongoing improvement in this area.
As computers get smarter and increasingly automate the routine elements of our jobs, human skills like emotional intelligence and creative, holistic thinking will become more valuable in servicing clients. Banks will therefore need to understand the different kinds of non-technical or “soft” skills that are required too.
Human skills like emotional intelligence and creative, holistic thinking will become more valuable in servicing clients.
I think it is safe to say that the pace of technological change will remain brisk in 2018. The good news is, having gotten used to this velocity, we may all find the ride a bit smoother.
Veronica Lange is the Head of Innovation at UBS Group Technology.