Let me join you on a journey into the year 2030. Could you describe a typical UBS client advisor and a typical UBS client at that point in the future?
Markus Iofcea: Current research predicts that we will become increasingly part of the Internet, but not yet fully integrated by 2030. Through this and other trends, we and our clients will have considerably more access to information in real time. Assuming UBS is still providing advisory services, we need to watch out for information imbalances arising between clients and their advisors. An example from the present shows where the journey is going: a television salesperson at an electronics store. There’s no way he or she can know all the models in stock, as new models come out every 12 months. The number of products also grows from year to year because customers always demand as much choice as possible. Furthermore, most customers come into the store very well informed. The trend has already impacted doctors and will soon affect teachers and UBS. In 2030, clients will use artificial intelligence to reach decisions; they will literally be augmented. We call this type of person “amplified ME.” To serve these individuals properly, client advisors will also need to be “amplified” so that information imbalances don’t emerge.
So there’s a big likelihood that AI will supplant other technologies, particularly in banking.
MI: Absolutely. In fact, most of today’s hot trends will be seen as completely normal and taken for granted, that’s if they still exist.
What current technologies will be replaced by others?
MI: I can’t say, because we’re always looking two to three decades ahead. If we go back the same number of years, we find ourselves in a world where people were still working with teletext, fax machines, standardized software and floppy disks. But who faxes invoices nowadays? And it’s the same with most things we use today. Today’s indispensable technologies are, from our standpoint, ephemeral. Yes, they are multi-billion-dollar businesses today, but they are subject to ever-diminishing life cycles. In the 2040s, people will use technologies we can barely imagine. That’s why, in our scenario mapping, we don’t even look at current technology trends.
How do you sketch your visions of the future?
MI: We examine trends in different parts of society, identify visible patterns and changes, and then project them into various future scenarios. Take population growth, climate change or technological and medical progress. The changes from one year to the next are negligible. But take a leap into the future and you notice significant changes. And that’s exactly what we do when we start thinking long term. In our future scenarios, for example, large land masses are already under water due to climate change, while Western societies have developed new employment and retirement models to cope with their aging populations. These societies won’t be shaped by ownership of an iPhone 18.
Instead, they’ll be defined by having very different needs.
MI: Precisely. Anticipating these new needs is core to what we do. We want to understand how to remain relevant to people living in the future under very different conditions in an entirely new environment. For example, I can imagine how people will become part of the Internet. We don’t ask how it would happen, but rather, what would it be like if we could communicate directly with all the objects in the world, and they could communicate with us and each other? "At UBS Y we don’t focus on the actual technology trends, but on their social impact". In other words, how they drive the dematerialization of the physical world. So what we need to ask ourselves as a company is how do we respond to this transformation to stay relevant in people’s lives?
What will be the most important parameters in 20 or 30 years?
MI: Climate change, population growth and technological progress will define the parameters above all else. The central driver of climate change is still CO2 emissions, which will impact many aspects of our lives. And as I said earlier, we’ll be connected permanently to the Internet, supported by smart, proactive assistants. And I don’t mean the kind of passive help provided by today’s assistants like Cortana, Alexa or Google Home. Tomorrow’s helpers will support and aid us with every imaginable decision and that includes the future of banking. And what happens if access to things becomes more important than owning them?
Let’s play out that scenario: What happens if our world is governed by that principle?
MI: In the music world, we’re already there. More and more people now prefer to pay for access to over 20 million songs than pay the same amount to own an album containing a dozen songs. The same trend has entered the world of movies (Netflix) and hotels (Airbnb). What does that mean for a bank that manages assets and property when ownership loses some or all of its importance? My team and I only look in those areas where our scenarios are pushed to the extreme and take society’s values and conventions over the edge, and where the emotional impact is high.
How would our lives change if it was more important to access a product than to own it?
MI: Look at the kind of bidirectional ratings you see with Airbnb or Uber, where consumers and providers rate each other. These ratings already affect our consumer behavior. If this trend continues until we award and receive stars for everything, we as consumers will be assigned to rating-based categories with access to certain services, but not others. If you don’t have the minimum number of stars on these platforms, all the money in the world won’t make any difference. It could theoretically lead to a huge power shift.
And what are the implications of such a reputational system for us?
MI: That in an online world we have to build up social capital – i.e. a digital reputation – to access products and services quickly and easily. "Someone without a digital footprint will live in a “parallel world” and be excluded from many aspects of our society".
Will consumers be willing to sell their data to gain more access and influence in the marketplace?
MI: That’s the big question. Perhaps we’re on the way to a transparent society. In an extreme case, this reputation system could extend not just to providers and consumers, but also to connected things like the fridge, our electric toothbrushes, and even our homes.
In this access-over-ownership world, algorithms tell us what is the ideal behavior.
MI: You will have to view yourself as a brand that you manage based on your likes, reputation and digital profile. Because this digital calling card is what gives you access to almost everything. Right now, we’re conducting an analysis to understand what implications this algorithm-driven world has for free will. The challenge for coming generations will be to manage their brand in such a way that they can still enjoy the kind of freedom that they want.
Markus Iofcea received his degree in computer science and communications from the University of Stuttgart. Before joining UBS AG in 2007, he worked at IBM’s Silicon Valley Lab in California. Iofcea has held several positions in different organizations during his time at UBS. While at the Chief Technology Office, one of his responsibilities was to develop the UBS IT Research Lab at the UBS headquarters in Zurich. During this time (2009–2012), he worked on big data and cloud computing projects. He was then made IT Project Lead for introducing of one of UBS’s first big data systems.
In 2014, he founded the UBS Y think tank. The think tank is a Group IT initiative that develops visions of the future for UBS. It is UBS’s first dedicated think tank.
Other memberships and interests:
- Member of the UBS Sustainability Council
- SwissTour Managing Director for six years, Swiss Disc Golf Association
Further information: ubs-y.com