Banks can embrace the disruptive technology that start-ups are bringing to the finance sector and use it to aid their own digital transformation, according to UBS bank's CIO, Oliver Bussmann.
Bussmann joined the Swiss Bank as CIO from SAP last year and was tasked with supporting IT-led change across the organisation. Speaking at a recent analyst event, he said that part of the 160-year old company's digital strategy has involved engaging with an ecosystem of start-up, venture capitalist and university communities focused on fintech innovation.
"There are over 3,000 start-ups in the fintech business, and investment into these firms has reached $3 billion, so there is significant change and there is more competition out there," he said, referencing a recent Accenture report.
"What we did was to come up with an ecosystem approach that established not only internal innovation teams and digital teams, but also embraced start-up incubators. For example in Zurich there is an incubator hosting over 100 start-up firms, and we now have now teams embedded in those incubators."
"We are also teaming up with universities, especially driving design thinking approach to put the customer in the middle and use design techniques to overcome complex challenges."
Bussmann added that the pace of change within the financial sector has quickened, with a number of non-traditional players entering the market and offering alternatives in areas such as wealth management, lending and payments.
"Start-ups are going into niches. They are taking one service process and trying to digitise it. Much of this is about the payment system - wallets, digital coins. Facebook, Google and Apple are all rushing to mobile payments too, so the whole payments business is seeing a big change."
He added: "It is a clear message in my organistion that we are driving to embrace this."
Addressing the pace of technology change in the wider market is one part of the digitisation strategy at UBS. The company has also adapted working practices internally to enable the organisation to move quickly to develop new technologies.
At the heart of this is a move to bring the IT department closer to the wider business, with UBS setting up separate digital teams within the company to support innovation.
"The core innovation approach involves setting up a work environment for combined business and IT teams with separate funding, removing any overhead or administrative burden to allow them to look at opportunities and build that digital mindset.
"You have to set up a team that is able to learn, expand, test drive and be successful. Building that knowledge and expertise is critical," Bussmann said.
Find your next job with techworld jobs