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FinTech fever is changing the dynamics

For a long time now the financial services industry has operated under a cloud, criticised (understandably) for a range of failings since the 2008 banking crisis.  It is clear there are still many areas where the industry needs to improve, but as I reflect on my time at SIBOS in Singapore I am very optimistic about the future.

I am very positive, because I believe technology will play a fundamental role in changing the dynamics.  It will disrupt out-dated practices, provide opportunities for new players and above all dramatically enrich the services offered to clients.  For a long time the industry has needed this shake-up and some institutions may be fall behind, but I am delighted to say UBS is taking a leading role in helping to transform the banking sector.

During my time at Sibos, many banking and finance executives voiced to me their concerns around the pace of change.  It is critical to balance the speed needed to drive competitive advantage against the importance of protecting our clients’ assets and complying with a much stricter regulatory landscape.  To those senior leaders across the industry still hesitant about engaging I would say we are at the start of our journey and business involvement is essential to ensure this technology transformation does not become consumed in its own hyperbole. It is important that a good cross section of business executives engage in this period of change to ensure we reflect the needs of all stakeholders.

For example, mobile banking is already making huge progress, but there are many areas to address.  If I look at its adoption rates it is succeeding faster in markets where it is not rubbing up against well-established transaction structures and users are comfortable with the accessibility mobile offers.  In more mature markets we are yet to provide a completely convincing argument for mobile in banking.  The likes of Apple Pay means it is seeping into the communal consciousness, so I expect to see rapid changes, but we need to temper our enthusiasm and listen to our clients’ needs.

Equally digitisation of services means data privacy becomes an even more important issue than it already is for every financial services institution. Recent malware incidents show how fast changing cyber-security threats are and how important it is for any new technology to place data protection above everything else.

The regulatory landscape is also becoming tougher and any new developments must be integrated.  Consequently IT systems need to have the flexibility and agility to respond to new demands from financial authorities.  This is challenging, particularly for smaller entrants to the market, because resources are finite.

Indeed the whole question of skills is a major one for the industry, because the wide range of exciting new technologies demands new skills many of which cannot be found in today’s institutions.  This is a big opportunity for more agile start-ups, but as an industry we have a responsibility to build a future workforce who will have the ability to design and build robust, reliable systems.

I started out saying there has never been a more exciting time to be in banking. I am sure that all the Regional Finalists of our Future of Finance Challenge are going to open our eyes to many more opportunities.

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What will tomorrow’s clients expect from us?

It’s a question I often ask myself.

A transformation is underway in global financial markets, driven by startup firms and disruptive technologies, and investors’ needs are changing too.

The pace of change has been dramatic. When I read that global investment in FinTech ventures tripled to $12bn between 2013 and 2014 (Accenture 2015), it cements my belief that the fintech revolution could be the greatest opportunity the banking industry has ever seen.

We need to be part of this growing ecosystem.

Yes, start-ups have the power to disrupt as they’re quicker, more agile, and less confined by rules, regulation, or legacy technology. But we bring something to the table they don’t have – in-depth understanding of our clients. This is why it’s so vital that startup firms and big banks work together, share ideas and combine their skill sets. It’s how we will maximize the business opportunities in our evolving industry.

With over 150 years of experience and a global reach, UBS has value we can add to the innovative process. How do we scale our ideas? Are we delivering what clients really want? Are we exceeding their expectations? The technology can be built and proven, but start-ups will still need to ask themselves these questions. We explore some of these issues and more in our new Life’s Questions series.

So how do we go about collaborating with these new and fast-growing firms?

It starts with making sure we’re part of the conversation. That’s why we were the first bank to establish a presence in Canary Wharf’s Level39, home to over 170 startups, and why we have established an innovation presence globally.

At Level39, we’ve created an innovation lab, a unique platform from which to explore emerging technologies such as cryptocurrencies and the tools that power them, such as blockchain. How will revolutionary ideas like these impact financial services in the future? We want to play a role in how these solutions develop.

Our specialists act as mentors to entrepreneurs, giving them a sounding board to help them answer the big questions facing their businesses, from regulatory issues to the best way to handle the next stage of expansion. We know expanding a business can be daunting, so our new brand campaign focuses on how UBS can help company founders get over the hurdles to growth.

But that’s not all we do. Another new initiative helps us find the innovators of the future namely our Future of Finance Challenge, a global competition to find fintech startups with potentially disruptive technological ideas and solutions that could reshape our industry. We’re looking forward to revealing the winners of this competition following the regional finals in November.

As well as tapping into the wider FinTech community, we know how important it is to make sure our own house is in order. So we have been investing heavily into new technologies within the UBS group.

Extensive market research is helping us to understand what tomorrow’s clients will expect from us, and we are building a state-of-the-art IT structure which will help us to deliver it.

As the world’s largest wealth manager, we want to stay at the forefront of thought leadership, whether in technology, services or products.

FinTech innovation is reshaping the landscape of financial services, and we’re excited to be part of that ecosystem

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FinTech Startups – Customers Not Cash

I’ve spoken to many entrepreneurs and quite a few have admitted that if you spent your time worrying about the consequences of failure you would never start your own business.

There is certainly a lot of evidence to back up the fact that most start-ups are destined to fail.  For instance a study by Shikhar Ghosh, a senior lecturer at Harvard Business School, estimated that more than 95% of start-ups would be seen as failures if it were defined as failing to see return on investment (ROI).  Another successful Silicon Valley seed venture capital firm, Y-Combinator, has said that a company in its portfolio only had a 1 in 10 chance of success. And according to CB Insights, start-ups typically die around 20 months after their last financing round and having raised $1.3 million, citing the main reason as an inability to identify a market need for a product or idea.

And yet I passionately believe there is no more important time to be an entrepreneur.  These well documented failure rates are at least partly due to too many start-ups focusing on finding finance, and not enough on building a customer base.

And yes, I speak as someone with a vested self-interest, because it is not just start-ups that are facing major challenges. The study by Richard N. Foster (of “Creative Destruction” fame), suggested that companies in the S&P 500 could also be facing serious threat.  He stated that only 14% of companies in the Fortune 500 from 1955 were still alive today and that an S&P 500 company was now being replaced about once every two weeks.  At the current churn rate, 75% of the S&P 500 firms in 2011 would be replaced in 2027 by new firms entering the S&P500.

Therefore, for my organisation, it is just as important to be embracing innovation in order to stay ahead of the competition.

For me, much of it boils down to commercialisation at scale. Over the years there has been a lot of debate about the potential of Fintech startups, but one aspect that it not emphasised often enough is how ideas are taken to market. It is an obvious, but logical fact that if a start-up cannot convince a customer to buy its product then it will very quickly join the long list of “nice ideas.”  Having that invaluable feedback and endorsement from a customer during the early stage of a company’s existence is critical to long-term survival.

Many small companies prioritise chasing investment before customers. However getting a big company as a reference client, not only provides money, it also provides a route to market, and lots of valuable real time insight into what the market needs and wants.

Getting that first customer is much easier said than done, but this is why I am so positive about initiatives such as UBS’s Future of Finance Challenge.  Today there is growing recognition in industries, such as financial services, that open innovation models offer significant mutual benefits to entrepreneurial start-ups and established players collaborating on new ideas and technologies.

Large and small companies need each other more than ever. Established companies have access to disruptive, agile start-ups with ideas that can open up new market opportunities, improve operational efficiency and strengthen customer loyalty.  While conversely entrepreneurs have access to a wealth of experience about product development, customer business needs and go to market models.  Personally I am convinced that this collaborative model is critical, because digital transformation demands faster responses to customer needs.

In 10 years time I’d like to think we could look at a very different and more positive set of statistics on the failure rate of start-ups, showing how the collaborative sharing of ideas, experience and expertise enriches the opportunities for all.  Would love to hear your thoughts!

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4 Challenges and One Mission: Redefine the Future of Finance

Today is a very exciting day for UBS. In case you haven’t seen the news, we have launched the UBS Future of Finance Challenge, a competition which is open to entrepreneurs and startups around the world with potentially disruptive technological ideas and solutions to support the transformation of the banking industry. As the executive with responsibility for our innovation strategy I am obviously delighted that we have taken this step. It underlines our corporate commitment to innovation as a key priority of our long-term strategy and more importantly, demonstrates our determination to support and learn from the global FinTech community.

I have said many times before, this is a very interesting time to be in the financial services industry. Technology has the potential to have an immensely positive impact on the sector, whether it is automating, digitizing or evolving the services we offer our customers. However, we know we cannot do this alone. Internally we are embracing the benefits of innovation in many ways through our in-house innovation spaces and the innovation labs we have established in Zurich, London and Singapore.

However, it is critical for us to work in collaboration with the broader FinTech community, because we recognize there is a lot we can learn from entrepreneurs and startups. Hence why we were so pleased to be the first global bank to move into Level39 in London. Ultimately our ambition is to help shape a more open and collaborative financial services industry and to jointly develop new solutions for our clients. We also hope that for those successful participants of the UBS Future of Finance Challenge we can offer a wealth of thought leadership and resources through our global reach. Above all, with our expertise, we hope to provide the opportunity to accelerate and to help you refine your ideas and bring them to fruition.

What does the UBS commitment translate into in practical terms? We are offering the regional and global finalists cash prizes and accelerator places worth over USD $300,000 and over 300 hours of dedicated coaching from UBS mentors and partners. We hope that through our contribution we can help to maintain the momentum of the FinTech startup community.

How do you enter the Challenge? Entries can be submitted by applicants from around the world on our website: www.ubs.com/innovate. The closing date is 23rd September, 2015.

We are looking for applicants to respond to one of four challenges:

  • Challenge 1: The Client Experience Challenge: – How will banks deliver the ultimate client experience?
  • Challenge 2: The Superior Offering Challenge: – How will banks create superior financial products?
  • Challenge 3: The Banking Efficiency Challenge: – How will banks step-change their efficiency?
  • Challenge 4: The Secure Banking Challenge: – How will banks secure their operations and their clients’ assets?

 

The Challenge is open to entrepreneurs and startups who have revenues of less than USD $3m and have received less than USD $10m in funding. We are also only considering startups which were incorporated on or after 1st January 2010.

A maximum of 15 participants per region will be shortlisted to attend Immersion Workshops in Singapore, New York, London and Zurich, whereupon we will chose 3 regional winners from each region to participate at the Global Final in Zurich on 10th December.

Good luck to everyone entering the UBS Future of Finance Challenge! I look forward to hearing more about your transformative technologies!

p.s. please keep an eye open for the launch event in your region end of August! More info and full details on the competition on www.ubs.com/innovate

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Social Media – the New Normal for Executives

I have long admired Peter F. Drucker and his works. One of my favorite quotes is” the best way to predict your future is to create it”, which is exactly what I have been doing for the past year.

Since moving to Switzerland, social media has taken a back-seat. I was fully focused on finalizing the dynamics of my new leadership team, reaching out to the business, and establishing myself within UBS. And now it is time to revisit the social media arena.

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Earlier this year, I was surprised and honored to receive the #2 spot on the top 100 most social CIOs on Twitter 2014. My social media activity has been practically non-existent compared to my earlier activities. I still see a significant potential for CIOs to be more active on social media.

When I reflect on the past year I see that the consumerization of IT is important, no matter which industry you are in. I noticed this when I changed from the hi-tech industry to the financial services industry. Getting the right balance for the consumer experience for the end user in the enterprise, in the banking environment and in my case, the level of investment to make in applications for banking mobile applications is critical. Consumer friendly is the way forward. Complexity is an unnecessary hurdle for innovation.

Consumerization of IT is not a one-off event. New devices are entering the market at an unbelievable pace. I am still hungry for the next new trend, most innovative gadget and am eager to see how wearable devices can be put to use at an enterprise level. The key question from an enterprise level always remain the same – should we embrace this gadget/trend or not, no matter which industry.

However, the issue keeping me awake most at night, is securing application services without limiting usability and user experience, whilst fending off cyber threats. The balance that ends this risk and brings usability is an ongoing challenge for CIOs of today. The cloud could be the answer here. Depending on industry, region and security I see a different speed of embracing, which confirms the way IT is delivering services is in the middle of a big change.

Follow me on twitter @obussmann.

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No Mobile Device for New ‘Monopoly’ Game Piece?

Hasbro made headlines this week with their cool crowdsourcing campaign: Save Your Token. Through multi-media marketing including Facebook and Twitter as the engagement platforms, Hasbro asked consumers to vote on retiring a Monopoly game piece and replace it with something new. The results were announced via Television on February 6. The campaign proved successful with fan participation from over 120 countries.

And the winner is…

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Much to my chagrin, I did not see a mobile device in the candidate pool. According to TechCrunch, the number of mobile devices will exceed the world’s population in 2012. A tablet or smartphone token would have been cool but ok, the cat wins and a new Monopoly star is born.

What I like about the campaign is that Hasbro used social media in a fun and creative way to engage consumers. What I love about the campaign is that the consumers had the final say. I’m sure Hasbro will see an uptick in Monopoly game sales before the iron is put away and another purchasing frenzy when the new token is put on the shelf. Well played Hasbro!

Making the increasingly smaller leap from the B2C world to B2B, the consumer is equally important. As I wrote in my last post, The Consumer IS the Enterprise, I pay close attention to consumer trends to anticipate enterprise demands. A good example of this is the movement towards enterprise mobility. Here’s a look at what we achieved at SAP:

Born out of consumer behavior which became employee demand, we’ve become the frontrunner and global trend-setter in leading enterprise mobility. We are driving the consumerization of Iinformation Technology:

  • Internal users can pick and choose between 10 corporate devices as Apple, Blackberry, Android and Windows devices
  • #2 iPad deployment globally with 20,000 devices
  • Bring Your Own Device (BYOD) role model with over 5,000 devices in 21 countries
  • Over 50 mobile Apps developed

But the focus on consumer doesn’t stop there. In 2012, we opened eleven SAP Global IT Mobile Solution Centers – the “genius bar” of the enterprise. Designed to showcase the most up-to-date and cost-effective mobile solutions and options that SAP supports, the first Mobile Solution Center was launched in India, Mumbai. In 2013, these Centers will continue to open in SAP locations around the world.

So, what are the key learnings that enterprise business leaders can take away from the Hasbro campaign? I’ll share a few:

  • Recognize the power of the consumer and use it to drive innovation in your business.
  • Harness the strength of social media to listen to and actively engage your audience.
  • If the consumer IS the enterprise, then expect to see increased adoption of crowdsourcing practices in the enterprise.
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Where I Work: My Office Isn’t a Photo Booth But…

For serious work, the three most important considerations are mobile, mobile, mobile. 

Here’s an Andy Warhol-inspired image of my work space. Each frame represents one of the multiple mobile devices I use throughout my day.

They give me the freedom to do my job effectively from any location and in a secure manner. Depending on where I am, what I’m doing and what I’m trying to accomplish, I can choose which device best suits my needs.

What’s missing from this photo? Paper.

In the past 14 months, I’ve completely eliminated the need for paper. No matter where I am in the world, I have everything I need to manage my work day via my mobile devices and apps.

I’ve set up this mobile environment not only for myself but also for 40,000 employees at SAP and it’s revolutionized the way we work.

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4 Powerful Social Media Shortcuts that will Surprise You!

Deemed the #1 Most Social Chief Information Officer on Twitter my social media strategy goal is simple…

Drive social collaboration by being distinguished as a thought leader and influencer in the Enterprise IT industry.

Unfortunately, I often see social media newbies with no apparent strategies or goals that struggle to grow their following.

As a result, I recently shared a short, but effective SlideShare presentation: “My 2013 Social Media Tips,” listing my top four strategies to successfully leverage social media to drive awareness and engagement.

I’ve used these easy to learn tips for the last three years to run our well-acclaimed SAP Runs SAP innovation program, which focuses on the transformation of social media tools for collaboration. We generated over 21 million twitter impressions in 2012 alone!

So what are my absolute top 4 social media strategies?


STRATEGY #1: Find your community … then set up a place for them to find you!

First, find the right community. Then open 1-2 social accounts to identify people with similar interests, and take some time to observe. In my case I’m using

  • Twitter and Google+ to instantly connect to what’s most important to me, as well as follow my friends, experts, and favorite celebs.
  • LinkedIn to manage my professional identity and engage with my professional network.
  • YouTube to categorize, store and share my professional videos.
  • Instagram to share snapshots from my global business ventures…
  • Evernote and Buffer to track articles about my friends, colleagues or anyone else I care about.
  • Klout to manage my social media reach

Second, you need to set up a place for people to find you… a center for all your social media activities.

My homepage OliverBussmann.com is based on WordPress, which easily links to most of the social accounts I listed above. It’s free and takes few minutes to set up!

For an easy read, be sure to use a compelling personal photo for your background, and list your experience and accolades in short bullets.

STRATEGY #2: Spend 15 minutes a day Sharing articles you find compelling! 

Your next step is to participate and become a part the community: Share links, engage in interesting discussions, and connect to others. Sharing and engaging are the operative terms at this stage.

Given my very busy schedule, I use a few shortcuts to engage that you will find handy:

  • Using a mobile app called Feedly, I scan over 200 headlines in less than 10 minutes every day.
  • I then look for posts that are relevant to my target audience – and interesting to me, and bookmark them with Evernote.
  • Last, I share those quality links on Twitter/Facebook/LinkedIn/Google+ via the Buffer app.
  • In 15 minutes I’m done!


STRATEGY #3: Deepen your connections …Keep your social profiles up to date!

Make sure to update your social profiles to show that you’re on the cutting edge of your field and on top of social media. In addition to LINKEDIN, I recommend to build your personal website.

Then to deepen your connection, consider starting a blog to expand your voice in the social media ecosystem as I did with the SAP runs SAP blog for instance. Important is that your blogs and tweets have to be authentic – no ghostwriting!


STRATEGY #4: Manage your social brand …as a thought leader should!

By implementing these four strategies and practicing them with excellence in your daily routine, you will become a genuine industry influencer and thought leader in no time. Reaching this stage strengthens your own credibility and benefits your entire organization.

  • Write and promote your blogs, your white papers and your articles from the traditional media
  • Team up with active bloggers to do interviews/article: leverage their network reach to expand your network
  • Do Twitter chats, webcasts and Google+ Hangout sessions on a regular basis
  • Set up your own YouTube Channel: Publish your videos
  • Mobilize your team to be social active

But don’t forget to manage your social brand! Simply type your name into Google and see what comes up. Remember: MOST social media followers will Google you.

Another free service I use is BrandYourself, to make sure search engines find and rank my most relevant results at the top, improving my personal brand.

I welcome your feedback, so please connect with me here and follow me on Twitter at @obussmann to share your thoughts.

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The Consumer Is the Enterprise

One thing I know for sure is that the Consumerization of Information Technology is here to stay. In fact, I’d like to remove the dividing lines between the consumer and enterprise worlds and call it like it is – the consumer IS the enterprise. We’ve seen this in 2012 with more and more companies embracing a mobile mindset, the adoption of Bring Your Own Device (BYOD), the influx of social collaboration tools and the “Internet of Things.” As Chief Information Officer (CIO) of SAP, I have to pay close attention to consumer trends because they quickly become a demand in the enterprise business. I think of my users as the consumer and there’s only one place for me to go where I can stay at the forefront of consumer trends: the Consumer Electronics Show(CES).

Attending CES for the second time last week in Las Vegas, I had the opportunity to test-drive some extremely cool gadgets, apps and technologies that are changing the way we live and work and connect with one another. As I walked around the CES 2013 show floor, I was drawn to exhibits like the “Smart-Home” because it motivates me to think about what this means for the corporate world – will we see a “Smart Enterprise” in the near future? Motion detection, machine to machine communication and augmented reality may seem like a good sci-fi film but this is what is happening now in the consumer world and it won’t be long before we begin to see this in the enterprise.

For Information Technology Leaders who are contending with the technology innovation whirlwind, my key advice is stay tuned-in to the consumer because it’s a preview of what’s to come for the enterprise. I invite you to watch this short vignette of my personal CES 2013 experience and I welcome your feedback and thoughts. Please connect with me here and follow me on Twitter at @obussmann.

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