Retail banking has been quick to use mobile technology to improve the customer experience, but has private banking followed suit? Future Banking speaks to UBS Group COO Dirk Klee and its head of multichannel, Andreas Kubli, to find out what efforts the bank has been making in this field.
Digital services are one of the biggest growth areas in retail banking that the industry has seen in recent times. The Pew Research Center estimates that 57% of US smartphone users have used their devices for mobile banking, while in Europe, Forrester Research suggests that 68% of tablet owners will be banking online by 2018, up from 35% in 2013. This upward trend only looks set to continue, with market saturation estimated to reach 89% in the likes of Sweden by 2018, meaning that banks must innovate in their digital banking offering if they are to compete.
UBS was an early adopter in this area in its retail business and customers seem to agree.
"On the App Store, our clients rate our product very strongly. We have five stars - the only bank in Switzerland with this rating," explains Andreas Kubli, head of multichannel at the bank. This success is a testament to the bank's long-standing commitment to developing its digital offering.
"We made this a strategic priority; we are embracing technology and we see technology as a business enabler - to bring better services to our clients," explains UBS Group COO Dirk Klee. "We have a whole environment, we created around technology, aimed at getting the best ideas to us, whether it is working with innovation labs or with universities. We have also built an intranet site that we call 'Innovation Central', where employees can bring their ideas to us."
However, the aim is more than just good ratings for its digital services; it also makes good business sense.
"We have return on investment that is significantly higher, and retention rates 25% higher for clients that use e-banking and mobile banking, compared with those who don't," confirms Kubli.
Logic follows that given its success in retail banking, UBS would want to replicate this in other parts of the business, namely private banking. But as a business, it relies much more heavily on customised face-to-face interaction, with clients expecting a more tailored service than their retail counterparts. "For example, UBS Advice is a service in which we provide health checks for the client, every night, and then we guarantee to call them in the morning if there is something untoward going on. This has traditionally generated quite a workload for client advisers who have to reach their clients all the time," explains Kubli. "And this is something we can easily provide digitally."
The right components
This forms the backbone of UBS's private-banking digital offering. "It's a digitisation of the UBS Advice product," agrees Klee. "It starts by sending an SMS or email to the client, saying there is something you have to look at. Then, in e-banking, the client will find an exact description of the problem found as part of the nightly health check. It explains the situation and makes proposals as to how the client can fix the problem. At any point in time, they can contact their client adviser or solve their problem online directly."
"So now we only need to bring the client adviser in when there is a need for personal discussion," says Kubli. So this serves the dual purpose of reducing the workload of client advisers, which in turn allows them to offer a better service to clients. This is part of a larger process of digitisation taking place at the bank, which aims to offer the full range of services digitally to clients.
"It's been happening for a long time; we are digitising all parts of the interaction, starting with some of the advisory content" says Kubli. "Historically, we invested lots of money into digitising the advice that would go to the client and what we are now doing is digitising the last mile - giving the client an additional channel besides traditional client advice."
That is something that both are keen to emphasise - the provision of digital services gives an additional channel to clients; they do not act as a replacement for face-to-face interaction. "This isn't about a robot substituting for a client adviser; it's about engaging with better data and making smarter investment decisions for our clients by using all sorts of technology. We have always been a high-touch business; our client advisers have relentlessly focused on bringing the best services," says Klee.
Providing more choice for choice's sake is not the aim, it is improving the service at the same time by using the data that working digitally can provide. "Now [advisers] can use better data to provide better and more finely tuned services, so it has enhanced the quality of our work," explains Klee. "We are in the investment advisory business and traditionally we have focused very much on the quality of the person, the relationship. Now we are adding technology to transform this into a high-touch plus high-tech business, meaning we have better data, better information and better advisory capabilities. The digital channel is not replacing the client adviser, its supplementing it."
"It has enhanced the quality of the jobs of the client advisers, because lots of the less-interesting admin-type tasks have gone online, allowing them to focus on the high-quality aspects of their work," agrees Kubli.
This improvement is already paying dividends, mirroring the customer satisfaction UBS has already enjoyed with its mobile apps on the retail banking side of the business, but Klee just sees this as the changing relationship between banks and their clients, with the latter expecting much more than they used to. "Yes, we have seen customer retention increasing, but it is the expectation of the client that we are multichannel 24/7; we reach them wherever they are, and we are at their disposal. It's not us providing it when we want; it's when and how the client wishes to communicate with us."
Above and beyond
The work doesn't stop there for the organisation; a process of continuous improvement in its digital services is required to maintain its enviable position for the long term. "In future, I see a difference in the way we provide this service to our clients. As a bank, we traditionally had in our DNA the idea that we had to build everything ourselves, but in the future, we will partner more with others. Our recent app was a joint venture with a start-up, so I saw more of an ecosystem where banks collaborate with others to provide perfect services to clients," says Kubli.
Klee sees digital services as the key to improving the much-maligned reputation of the banking industry. "Dealing with your bank should not be ranked alongside a visit to the dentist; it needs to be a client experience; it needs to enhance the way you look at your finance and the way you look at your life. We want to be the partner of our clients through the life cycle of his or her investments."