UBS Center Newsletter July 2018

5 The panelists then discussed whether and how the new fintech companies reshape the industry. “The question is: How will the established financial insti- tutions react to the new players?”, asked Bernegger. The barriers between different industries are fading. This is a good thing because it will lead to more innovation, concluded Diemers. Does Swiss finance have a future? Sergio P. Ermotti, Group Chief Executive Officer of UBS Group AG, opened the second part of the Podium with a keynote speech on the future of Swiss finance. And he made it clear: Switzerland as a financial center is important today because time and again there were people in our country who saw new opportunities and seized them. Ermotti has no doubt that Switzerland can remain successful – but only if we are not content with just being good. Looking back over the past 20 years, the financial industry has been characterized by two major phases – one of innovation and extreme growth, and one of destabilization and intensive regulation. What can we learn from the past? Ermotti’s answer: “There has to be a balance between innovation and regulation.” Moderator Katja Gentinetta (in the middle) with Sergio P. Ermotti and Christina Kehl on Switzerland’s potential to overcome obstacles and continue the success story of Swiss finance. Looking ahead, he talked about major changes driven primarily by technology and asked how we can be innovative and sustainable at the same time. While acknowledging the risks for the banking industry (e.g. cybercrime, big data) and for society (e.g. replacing people with machines), Ermotti views digitalization above all as an opportunity. In fact, the digital future began long ago. UBS, for instance, invests more than 10% of its revenue in technology and systems to become more efficient, to make its products more attractive for its clients – and at the same time, to give employees the opportunity to perform more interest- ing tasks. However, Ermotti is concerned about the adaptability of the political structures in Switzerland and asked: Is our political system suited to the greater speed of this technological world? He then elaborated on three major areas, which, in his view, need to be improved to keep Swiss finance in the game: DIALOGUE & EVENTS Podium on the future of Swiss finance, a clear vote by Sergio P. Ermotti. “We need smarter regulations, closer integration, and more rapid digitalization.”