UBS is betting on content modularity to further grow its discretionary business – a move its fintech competitors may find hard to replicate, according to Stefan Lecher, APAC head CIO for global investment management, in a conversation with finews.asia.
Interfaces and experience on fintech platforms are widely viewed as more intuitive and user-friendly compared with traditional banks. While this may bode well for the former for simple solutions like payments, more complex ones such as discretionary mandates may require more than just a good look and feel, according to UBS.
«What fintech firms have is the cool interfaces – we know because we looked at them,» said Stefan Lecher, Asia Pacific head chief investment officer for global investment management at the global wealth unit, in a conversation with finews.asia. «But where they cannot compete is the content and how to put it all together.»
«MyWay»
In an effort to leverage technology to further grow its discretionary portfolio management business worldwide, the bank rolled out a new offering – MyWay – that allows clients to move closer to full customization of their mandates.
The platform enables users to construct portfolios not only by selecting a preset option but also by modularly allocating capital to a wide range of so-called building blocks – pre-made investment allocations that are defined by asset classes, themes, strategies or other methods. Controls will indicate whether a mandate falls within set parameters based on a client’s profile to ensure that a portfolio is not taking too much or too little risk during customization.
The offering was launched in October last year and as of January 2021, assets under management on the MyWay platform exceeded $300 million in Asia Pacific and $2 billion worldwide.
Massive Shelf
Globally, the bank has 70 modular building blocks, leveraging its gargantuan investment and research engine to deliver performance and content. Within Asia, there are 46 building blocks available for usage and the firm has already seen cross-sharing of ideas between regions.
In fact, UBS recently launched a China equities module aimed at its Asia clientele but because of strong interest, it was also made available in Switzerland. And since its introduction, it has become the most popular module for implementation in the Swiss market.
Sweet Spot
According to Lecher, the bank launched MyWay with three objectives in mind for the discretionary business: enable better customization; create an adaptive system; and enhance user experience. Especially for Asia where investors are renowned for their hands-on tendencies, such a platform could enable more interest for discretionary solutions which are not traditionally known for frequent allocation changes. «We have a full spectrum of new users of the MyWay platform,» Lecher said, highlighting client feedback on the allure of both modular access as well as an interactive technology.
«But what they all have in common is that they want to engage. They want to control how their portfolio is built and managed without having to deal with all nitty-gritty administration details. The balance of keeping control and not having to do the hard work is the sweet spot.»
Hard Act to Follow
While the bank is rapidly learning the ropes on how to develop better user interfaces and experience, Lecher believes that replicating such efforts with regard to investment management is not as easy.
«Many [fintech firms] will have discretionary offerings with six profiles and a couple of ETFs. Adding anything more to the offering such as single stocks and a wide range of modules across all asset classes bonds will be too complicated requires a much more robust investment engine and platform,» he explained.
«We want to capture a significant slice of unmanaged money and I truly believe we have a game-changer with this latest approach because it fundamentally changes the client experience.»
