Alison Ebbage, Editor-in-Chief at The Wealth Mosaic, talks to Helmut Schmid, MD, Head of UBS Partner. He explains that the enthusiasm for front-end functions and user experience relies heavily on a platform that can support and integrate many different software applications, as well as cope with large volumes of disparate data.

Attention in recent months has been firmly placed on the functions and enhanced user experience afforded by front end solutions. Clients have high expectations, and wealth managers need to deliver if they are to retain existing clients and attract new ones, particularly in the context of the ‘Great Wealth Transfer’ and an anticipated mass movement of the newly inherited away from existing wealth managers.

Helmut Schmid, Head of UBS Partner, comments: “I think you need to create content and you need to create interaction to keep clients engaged. Today, this means digitised interactions and a range of front-end tooling to support that.”

But crucially, Schmid says, front end solutions need to be instantly intrinsic and user-friendly. “No one reads the manual anymore, and if something is not instantly easy to use with little to no effort, then it does not stand much chance of ever being used.”

However, this focus on function and design has not been to the detriment of investment into infrastructure and the back-end architecture or platform. Indeed, Schmid says that overall, the link between a robust core architecture and the proper functioning of the front end is well understood.

He points out that as opposed to a front end application, that does one thing very well, the range and volume of demands on the back end are both many as well as constantly mutating and evolving.

Both the front and back end need to grow in sync. Otherwise, there will be too much pressure on the back end, leading to reduced function and experience at the front end. This means either losing clients because your front end is terrible or losing clients because your data capabilities and processes are not up to the demands of the front end. Neither is an ideal situation to be in,” he says.

Priorities, he says, obviously differ for someone more involved in sales, who naturally tends towards investment in the front end because it directly links sales and retention. A CTO, meanwhile, is looking for a stable overall architecture and understands the need to get the engine room right if the front end is to function as it should.

“When it comes to the back end, the CTO is looking for something that can meet the demands placed on it by downstream systems and applications. That means something that is scalable, that is cheap to run, able to be ‘on’ 24/7 and cope with the massive volumes of data and integrations being asked of it. Then, if you add new elements like Artificial Intelligence (AI), there is an additional piece in that data needs to be cleaned and normalised before being fed into AI algorithms - all supported by the back end.”

Connectivity
Advances in connectivity have largely led to such demands. Schmid points out that real-time backup and processes could only have been dreamt of just a few years ago. “So, as a result of an ‘instant, always on’ world, core infrastructures today need to be robust and proven. They also need the same qualities when it comes to data privacy and security, which are very much front of mind,” he says.

He says that it is all too easy to take security for granted. “As an IT person, I think it is impressive that things, on the whole, work so well and so smoothly.”

Scalability and extendibility also come up as high on the list of needs. “I think we can say for certain that everything relies on having proper data models that are fed the right amount of data in the right format.

Let’s take the example of electric vehicles (EVs). While valuable in terms of operating that particular vehicle, the data generated from one vehicle is rather limited in terms of use. However, the moment we have aggregated data from all EVs, we see the true impact and power of that information. As a result, back-end systems need to be able to consume all that data, integrate it, store it, as well as host the analytics capabilities and programmes.”

The ability to do all this not just at scale but using many sets of data from different applications and systems adds an additional layer - not just in terms of data volume and computational power but also in terms of hosting and integration. Moving back to the car analogy, it is not just the single car, or even all the cars, it is the roads and other intersecting networks that come into play; managing the signposting and signalling, and making sure that one-way systems, bus lanes, and the like are adhered to.

Schmid comments: “The more a platform becomes extracted in this way, the more complex and challenging things get... It does feel like a platform’s capabilities have to be limitless because the requirement and the standards are also limitless.”

Indeed, he says it is all too easy to forget that if the back end cannot be limitless in the same way as the front end, things will eventually grind to a halt.

“Things are getting extremely complicated. In other words, we need to find a good balance between a nice front end in that we need to be still flexible to evolve and change. But on the other hand, we want to have robust and adequate capacity on the back-end side. With this, I think we have to find the middle ground and meet the challenge between new functionalities and the back end to support them.”

Interested in reading the full report? You can read this edition of the Swiss WealthTech Landscape Report 2024 online here.