UBS to start venture capital fund for fintech investment

The Swiss multinational investment bank UBS Group AG is allocating hundreds of millions of dollars for investment in fintech companies.

UBS is planning to start a corporate venture capital fund to invest from $10 million to $20 million in dozens of companies. Purportedly, the company intends to hold the stakes for five years. The details have not yet been finalized and the wealth manager has not disclosed any details on the venture fund.

The venture fund follows the appointment of ING Groep NV’s Ralph Hamers as chief executive officer from October. Hamers who is an outspoken advocate of digital banking, succeeds Sergio Ermotti. USB’s biggest business – wealth management traditionally values personal contact, however due to the corona virus pandemic, the company has shifted towards digital services.

UBS to start venture capital fund for fintech investment

Mike Dargan, UBS’s Global Head Group Technology said:

UBS wants to further engage with and support fintech firms. The new venture investment portfolio is a next step to accelerate our innovation and digitization efforts.

UBS’s new venture fund will invest in three main categories including client engagement, financing platforms and boosting underlying operations of the bank. The bank is already screening potential investments but it is still in the process of hiring a dedicated team.

More digital tools are important for the bank as it is looking to cut time on administrative tasks and save on costs.

As UBS is starting to invest in fintech, other US banks are already steps ahead. The Zurich-based rival Credit Suisse Group AG is also already investing in fintech through its entrepreneur capital arm.

USB is also looking to expand to the Chinese wealth market through its technological endeavors as it is currently in process of acquiring a digital fund distribution license.

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