Strictly confidential

Shane WilliamsOctober 11th 2017

SmartWealth

LendIt Europe

Public

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Observing change

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Changing Landscape.

• 4th Industrial Revolution being driven by extreme automation and connectivity , implementation of artificial intelligence.

• Rise of FinTech firms

• Disruptive innovation in financial services exerting pressure on traditional business models

• Robo-advisors, online platforms for self-directed, algorithm-driven investment

• Fully automated, no human interaction, state-of the art user experience, low fees, low minimum levels of investment, straight-through processing

• Portfolio of ETFs

• Robos targeting Millenials • Born into an era of mobile

technology and social network • "High earning, not rich yet"• Shifting customer preferences• Highly overlooked by large WM

firms

• Many new entrants enter the landscape

• Large players are also now coming to market

2015 20202010

REVOLUTION REBELSROBOS RUSH

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Thinking differently

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Build or Buy.

• No or limited legacy• Use latest

technologies• Use latest

architectures• Perfectly suited to the

experience you want to create

• Can integrate and use services within the company

• Everything already set-up and running

• Already have clients

• Start from scratch – have to write everything

• Have to make technology bets

• Have to deliver the whole business, including operational aspects

• Culture may be different

• Technology integration?

• Cost – high valuations

• Solution might not be exactly what is required

BUILD BUY+ - + -

$

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In or Out.

• Agility + speed ofdecision making

• Foster innovation• Lower initial cost

• Licence in place• Leverage brand• Leverage expertise• Lower integration cost

• Licences, regulatoryapproval

• Operational controls +risk management

• Brand• Higher integration cost

later

• Agility = hard work• Not invented here

syndrome• Noise and fear of

disruption• Bureaucracy

OUTSIDE EMBEDDED+ - + -

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Build a Business not a Channel.

ON

-BO

AR

DIN

G

TEST

DR

IVE

LOG

GED

OU

T

MARKETING & SALES

PRICING

FRONT-END ELEMENTS

PROCESSES

OFFERING

CMT

BACK-END SYSTEMS

SOLU

TIO

NDEVELOPMENT

IN L

IFE

"PLACE"

"FACTORY"

"LOGISTICS"

"SUPPORT"

"PRODUCT"

"PRICE"

"PROMOTION"

BUSINESS IT

DATA ANALYTICS

CONTROL FRAMEWORKSTAKEHOLDERS

VISION

• Client Journey• User Experience• Requirements• Product

Roadmap• Reactive

Enhancements• Change Mgmt

Procedures

INVESTMENT PRODUCTS: Offering Architecture / Product Features / Digital Financial AdviceCONTENT: CIO & IPS Content / Educational Content / Contextual Content / Editorial Board

Query Handling / Complaint Management / Service Excellence / Client Development / Training & Gamification

• Data Feeds• KPI Framework• Client Insights• Web & campaign analytics• Complaint & client satisfaction• Predictive modelling• Customer value modelling

Business Rules / Risk MitigationRegulator / Legal / C&ORC / AML / Credit Risk

NBI / ODP

Value Proposition / Positioning / Branding / Narratives / Communication Plan / Acquisition Strategy / Campaign Management

• IT Architecture• Release

Management• System Integration• Testing• Maintenance• Security

Business Integration / Requirements ValidationIPS / HR / Operations / Marketing / CFO

other Initiatives / other Divisions

STRATEGY

BUSINESS DEVELOPMENT

FINANCE

GOVERNANCE

CULTUREPeople Strategy / Business Priorities / Values / Behaviour / Motivation /Reward

Planning / Targets / Business Performance / Management Communication

Organisation Structure / Governance Bodies / Business Management / Role Profiles / Hiring

Strategic Rationale / Global Rollout

Funding / Budget

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The layers of success by digitally enabling

Foundation layer

Digital support for Advisor led model

'Pure' digital advisory

Complement the traditional advisor-centric model for with a digital-only model→ UBS SmartWealth

Enhance the traditional advisor-centric model for using technology and integrating all relevant channels (Advisor, Specialists, Online /Mobile, Service Centers, etc.) in a seamless way.

Critical prerequisite to build our digital capabilities at scale→ One Wealth Management Platform

→ Related main initiatives

The 3 building blocks.

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• Microservice architecture (Java/React)• Multi-entity capable• Multi-language capable• Abstraction layers for multiple services (flexibility)• AI (NLP) for onboarding to enable STP

The TechnologyWhat did we build, as we had a clean sheet

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Operation.

How to operate?

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• Get access to people who can navigate and can orchestrate access to existing capabilities

• Involve internal subject matter experts

• Leverage licences and a well known brand

• Build on 150 years of heritage and expertise based investment knowledge

Find a sweet spot.

Combining the capability and heritage of UBS… … with the agile approach of a start-up.

• Allow greenfield approach • Increase speed of decision making• Agile product development• Collaboration due to co-location

• Limited and lean investments• Data Driven Decisions - AnalyticsUBS SmartWealth

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• Outside-in view• Experience design, Design thinking, blue sky

• Tools to define value• Business model canvas, VP canvas

• Craftsmanship & change makers• Control functions• Legal, compliance

• Senior sponsorship

Ingredients for success.

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The people.

• Diverse (truly)• Co-located• Multi-disciplinary • Experts• Push for change

• Keep stimulated and engaged

• Constant pull from other organisations (inc start-ups)

• Constraints of large organisation (equipment, processes etc)

THE TEAM+ -

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RipplesThe art of the possible

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ScaleShowing the scale of the team

You are here.

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Online Access • With hard token, card reader and password only. • Two-factor authentication using e-mail address and mobile telephone number.

Risk Profiles • Standard questions. • Complex stress-tests to confirm client's capacity to withstand risk as well as their attitude to risk.

KYC Checks • AML require manual searches every year. • Fully automated and continual.

Portfolio Performance • From monthly. • To Daily

Account Creation • Manual paperwork and taking days once returned correctly completed.

• Within 6 minutes once a client has submitted the on-boarding form.

Today

Business Transformation, the aura effect.

With UBS SmartWealth

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Feedback.

On the right track?

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Business Performance.

Digital offering allows high operational efficiency based on systematic application of data analytics.

• Scalability to increase client base efficiently

• Anticipate changing needs to attract new clients

• Highly reactive to quickly respond to observed client behaviour

UBS SmartWealth

Instrument & Analysis

Predict

Test & Learn

KPI / Business Performance

Business Case / Objectives

Get feedback from system

Destination locked in

The cockpit to anticipate upcoming obstacles and to steer the UBS SmartWealth business into the right direction.

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Business Performance1. KPIs• How the Business is performing – an overall view

2. Marketing Segmentation• The core marketing knowledge of the customer base

3. Marketing Models• How UBS SmartWealth positions itself to acquire and retain valuable

customers• Value Models to calculate the current or potential value of customers

4. Predictive Models• Predict how likely it would be for a customer to take a particular action• Forecast the number of Customer Service Centre (CSC) agents at different

times

5. Campaign Analyses• Detailed analysis to select customers • Analyse the success of a campaign and revenue generated as the result of

that campaign

6. Customer Service Analytics• Analyses of the complaints, customer satisfaction, increase the efficiency of

the CSC agents in dealing with different queries

7. Web Analytics• Number of pages clicked, time on each page, most hit pages, when the site

was abandoned, time between return visits, etc…

Insight

1. KPIs

2. Marketing Segmentation

3. Marketing Models

4. Predictive Models

5. Campaign Analysis

6. Customer Service

Analytics

7. Web Analytics

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Expansion, what's nextThe tech supports, future roll out tbd

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SmartWealthBringing your wealth to life.