One theme that I have been seeing in weekly blog posts is discussion about the present and future of fintech and banking’s relationship and whether or not banks will produce their own fintech to compete, or if they would rather seek to work with fintech companies, seeing the importance of FIS integration. The article I chose this week discusses this exact issue, as UBS’s COO speaks about how he believes banking is beyond trying to compete with fintech and should instead incorporate fintech and work with financial information systems as much as possible, realizing that fintech is the future.
I think this joining makes a lot of sense, because in the post 2008 market crash era, many fintech companies came up and innovated the finance industry; however, these companies still do not have the capital to scale effectively, so integration and working directly with big banks could help fintech become more immersed throughout society. Still, on the side of the rise of roboadvisors that do wealth management digitally for people, UBS’s COO feels that humans still have an upper hand in the level of understanding that we have and its benefits in investment management. As a Finance major myself, I agree that a human touch from financial advising cannot be replaced by AI; however, I do concede that fintech can improve and streamline many other areas of FIS.
Link to article: http://www.businessinsider.com/ubs-dirk-klee-fintech-roboadvice-china-2017-2
I read this article too and I agree that it is to both parties’ benefits that incumbent banks collaborate with financial technology companies. However, I was confused by the fact that UBS, despite supporting collaboration, developed the roboadvisory service on their own.