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How UBS built its digital financial management service SmartWealth 'like a startup'

Scott Carey | Aug. 11, 2017
How two people within UBS pitched the robo-advice business for seed capital and built a digital wealth management service from scratch in just twelve months.

 

The technology

Next, Williams engaged existing business units at UBS to create a set of APIs, which he could quickly leverage and plug into the SmartWealth platform.

"There was some work done in Switzerland around investor profiling to find the psychology of people, beyond just how much you have and could lose if the market went down, to how you feel about it," he explained. "We basically took that work and the wealth planning modules and got the bank to wrap a nice API on top."

From the start SmartWealth has been built on a progressive microservices architecture, there is AI embedded within the onboarding process, and the development team runs on monthly sprints for feature releases.

UBS is still a Swiss bank though, so this isn't built in the cloud. "We have got a small internal cloud and everything is on-premise on our own servers, so no AWS or cloud-based services," Williams said, "those servers interact with other services within the bank behind the firewall.

"For us the fastest way to spin up and get going was to utilise those servers internally as we have high requirements for security and those servers are already hardened. That doesn't mean we wont go to the cloud in the future."

 

How does it work?

The 'robo' part of SmartWealth comes with automating large parts of the onboarding process, which is self-serve, via a chat interface.

Williams explained how it works: "The process is we assess your financial situation, so earnings, how much you have saved and what you have invested; that is the factual part. The next part is the behavioural finance part, where we start to assess loss aversion, uncertainty aversion; all the unconscious biases that you make."

SmartWealth doesn't offer the popular "slider" interface seen at UK rivals Nutmeg or Wealthify, when it comes to assessing risk though. "People will always pick the higher number," Williams explained. "Where in fact it is based on risk, so are they prepared to lose an amount as well? So rather than answer questions, which can be affected by unconscious bias, we actually use pictures and charts to find the tipping point.

"So you keep choosing and the charts keep changing, using numbers you have already provided to find your tipping point, rather than answering A, B or C."

Then customers get access to UBS funds, which are anything but "robo". SmartWealth customers are actually plugging into the wealth planning department at UBS, "so we took some of the technology that they had for projecting the future using Monte Carlo [algorithms], but it's what our chief investing office says the future will look like.

"So this is two hundred analysts trying to predict the short and long term view of the markets and create asset allocations for a ten year strategic view and monthly tactical views. We do that anyway for the millionaires and billionaires, and with SmartWealth you tap into that.

 

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