UBS Trials Netflix-, Spotify-Style Trade Algorithms - Report

Robbie Lawther

15 August 2018

The world's biggest wealth manager is applying recommendation algorithms to propose trades to its clients that are similiar to those used by Netflix and Spotify, according to the Financial Times.

The technology is in its early stages of development but the algorithm is being trialled by UBS's corporate bond trading business with plans to use it in other asset classes.

“Imagine what the world looked like when you watched television and had to scan through channels, whereas now it is not only on demand, it is presented to you so you easily find what you are looking for,” Giuseppe Nuti, head of data science in UBS’s FX, rates and credit strategic development lab. “That’s what we are trying to do for our clients, presenting them with a choice of likely, interesting trades.”

Currently, the recommendations pass through UBS’s salespeople who decide whether to pass them on to clients. However, this will eventually be phased out.

“A good salesperson calls his or her client and goes over what they think will be interesting for the day. We are trying to automate that. It means the job of a salesperson, which in many ways has remained immune to the technology revolution, will likely change,” Nuti said.

Nuti told the FT that having enough data for the system to process and produce reliable results is the real difficulty.

Wealth managers' embrace of such technologies is another example of how the Big Tech and banking worlds are blurring, with technologies coming from the world of online retail and gaming increasingly shaping some of the services and tools used to manage and oversee financial assets.

In June, this publication reported that part of UBS Wealth Management's strategy it is to expand its UK operation irrespective of the uncertainty over the impact of Brexit.