UBS and Julius Baer struggle to offer wealth advice in the metaverse

Two of the world’s biggest wealth managers are experimenting with switching client meetings from oak-panelled boardrooms to the metaverse, but have struggled to overcome data security and motion sickness.

UBS and Julius Baer, Swiss banks that specialise in providing white-glove financial advice to billionaires, have each trialled the use of clunky headsets and pixelated avatars to interact with clients, according to people involved in the research.

But neither bank is close to rolling out a virtual reality offering to their ultra-rich customers after the experiments caused concern over the technology’s ease of use and the ability to share documents securely.

“The technology is not there yet — frankly it looks like Atari graphics at the moment and people who have tried it have had feelings of motion sickness,” said one bank executive involved in the trials.

“We also have a lot of issues with confidential and sensitive data security.”

The metaverse is an immersive virtual world where people wearing headsets interact with one another as three-dimensional avatars.

It has been championed by the likes of Mark Zuckerberg, the founder of Facebook, which was renamed as Meta last year and has provoked ire from investors for its heavy spending on virtual reality.

Wealth management is one of the last professional services to be disrupted by digitisation as the ultra-rich value personal interaction with their advisers when discussing their investments.

But some wealth managers have begun investing heavily in technology in recent years to make sure they are prepared for changing demand.

Since becoming chief executive of UBS, the world’s biggest wealth manager, two years ago, Ralph Hamers has prioritised investment in digital technology to cut costs and differentiate the group’s offering to rivals.

“We will use digitalisation and all the opportunities it brings to provide personal advice, and use digital technology to tailor that advice to clients’ needs,” Hamers told shareholders at the bank’s annual general meeting this year. “This is not a question of either/or: clients decide what they want, and our job is to deliver what they want.”

Hamers had pursued the use of artificial intelligence in wealth management through a $1.4bn acquisition of US advisory business Wealthfront, but UBS aborted that takeover in September.

A person involved in UBS’s trials of virtual reality said the bank was trying to find ways to improve the digital meetings it is already increasingly having with clients.

“We have gone through some experiments,” they said. “We have set up virtual offices in the metaverse, we have tested how to engage with clients, different ways to play with it, how does it look, how does your avatar look, does it really help us. 

“We’re not there — it’s still very much experimentation.”

UBS has previously trialled using augmented reality technology to enable staff to recreate a trading floor environment while working from home during the pandemic.

Fellow Swiss bank Julius Baer has also committed to spending heavily on technology in the next few years and has experimented with virtual reality.

The bank ran a 12-week pilot for a group of staff to hold internal meetings in virtual spaces, while 200 executives recently took part in a “metaverse experience” at a senior global management conference.

“There’s no outward facing use of this kind of tech at this stage, and it is really meant to build a knowledge and understanding of the space in order to be ready once the technology is in the right place and, importantly, once outstanding regulatory issues are addressed,” said a person with knowledge of the trials.