UBS Group AG plans to invest $200 million of its own money in fintech companies over the medium term in a push to further digitize its services and find new ways to engage with clients.
The portfolio, called UBS Next, will be run by a dedicated team and take mostly direct stakes in early-stage fintech and other relevant technology companies, the bank said Tuesday from Zurich. As part of the project, UBS started a strategic collaboration with Anthemis, a venture capital firm that will help the Swiss wealth manager source deals.
UBS is pushing deeper into financial technology as competition and negative interest rates squeeze profitability while the coronavirus pandemic accelerates adoption of digital services, even in the traditionally high-touch business of wealth management. The bank hired former ING Groep NV Chief Executive Officer Ralph Hamers to take over from Sergio Ermotti next month, tapping an outspoken champion of digital banking to lead the world’s largest wealth manager.
UBS’s venture fund aims to make investments of between $5 million and $20 million to either help fund development of financial technology tools, for example in blockchain or artificial intelligence, or take minority stakes in fintech companies. The bank is also currently evaluating several other fintech investments.
UBS follows a trend of banks acquiring or financing startups that may upend traditional ways of banking. Morgan Stanley recently closed a $13 billion deal to buy discount brokerage E*Trade Financial Corp. in part to give the Wall Street bank digital capabilities and to reach retail clients who trade.
