Application of data analytics technology could revolutionise capital markets advisory and client services, says Ronald Jansen, head of UBS’s global banking data lab.

Ronald Jansen

Ronald Jansen

While the sales and trading area of investment banking has become highly automated over the past few decades, the advisory and client services space has a long way to go yet, says Ronald Jansen, head of UBS’s global banking data lab.

“Sales and trading used to have several hundred people on the floor to trade single stocks, whereas today only a handful are needed to execute trades on digital platforms. Yet that transformation hasn’t happened in classical investment banking,” he says.

In this area, an army of junior bankers manually create analytics to help senior bankers pitch their analyses and ideas to executives at client companies. “They download data from sources like Bloomberg into spreadsheets, perform calculations and then turn the analytics into a PDF or PowerPoint presentation for a senior banker to take to a client meeting," he says. "They are using the same technology that they used 20 years ago. But that is beginning to change now with data and technology – and the opportunity is huge because this business is very data intensive.”

That is not to say the human element of advisory and client services will be replaced by an artificial intelligence (AI) robot automatically communicating with clients. Instead, Mr Jansen believes that technology and data analytics could better support the process of getting the right information into those client conversations. “This is where data and advanced forms of analytics, such as machine learning, can make a big difference,” he says.

Career history: Ronald Jansen  

2018 UBS, head of the data lab, global banking

2010 Goldman Sachs, managing director, head of a global team of IBD strats

2005 Goldman Sachs, associate, equity derivatives and strat in equity capital markets

2003 Computational Biology Centre, Memorial Sloan-Kettering Cancer Centre, research fellow

The art of AI

Mr Jansen leads the data lab that is part of UBS’s global banking business covering corporate finance, equity and debt capital markets (ECM/DCM), merger and acquisition (M&A) and advisory work. “Our mission is to apply AI and other predictive analytics to our global banking businesses to better understand what is happening with clients, where the opportunities are for us and our clients, and to give them better advice,” he says.

Being innovative comes with risk, however; Mr Jansen’s team manages the risk by starting small, so the business does not invest a huge amount of capital and time on an unproven initiative. “We develop a proof of concept to demonstrate the value and then scale up from there,” he says. “All our solutions are in the area of automating processes and engineering workflows, so that we can have this collaboration between intelligent data analysis and human judgement.”

According to Mr Jansen, an artificial separation between the business and technology cannot exist if a bank wants to innovate at the speed required today. “Either you understand that, which will help you introduce technology and transform businesses, or you don’t, and change becomes much, much harder,” he says. “That is why my team is part of the business – we are in the best position to innovate.”

Culture change

Mr Jansen believes that innovation is a collective effort. “Innovation breakthroughs are often happy accidents, where two people come together, exchange thoughts and put the pieces together for a great idea,” he says. As such, his team includes both data scientists and investment bankers – and each is trained in the other’s skill set.

He teaches investment bankers how to apply coding and analytical skills at a professional level “to the types of problems that we want to solve”. He also hires data scientists and teaches them about the investment banking business. “They may know all about statistics, but they don’t know how an initial public offering works or what happens in an M&A transaction,” he says.

By taking this approach, argues Mr Jansen, investment banks can also improve the experience of the smart young graduates they hire, providing them with more interesting work that will incentivise them to view investment banking as a long-term career. “Today, their experience inside a bank is doing menial and repetitive work in support of senior bankers, and after a few years many leave to make their name in other areas like hedge funds and private equity, or even go to Silicon Valley,” he says.

Coding skills

As many as 50% of recent graduates know how to code, according to Mr Jansen. “These skills exist and we, as senior bankers, need to figure out how to give them the tools, possibilities and platforms to apply these skills to their day jobs,” he says. “If senior bankers let graduates use their data analytics and coding skills to work more intelligently, then real change begins to happen. But you need both – people with those skill sets and senior people that understand the skills and how to use them most productively.”

Mr Jansen can lead from the front in this respect, being both a senior banker and a data scientist. Before joining UBS in 2018, he spent 13 years as a quant, derivatives structurer and data scientist at Goldman Sachs. Prior to that, he conducted research in the area of computational biology and genomics, and holds a doctorate in bioinformatics from Yale University.


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