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UBS trials Netflix-style investment recommendations

UBS could soon be applying recommendation algorithms to propose trades to its clients that mirror those used by Netflix and Spotify.

UBS trials Netflix-style investment recommendations

Gone are the days of flicking through TV channels or perusing through record shops, with algorithms now picking the shows we watch and the music we listen to – and this could soon be the case for investing.

UBS is applying recommendation algorithms to propose trades to its clients that mirror those used by Netflix and Spotify, according to the Financial Times.

‘Imagine what the world looked like when you watched television and had to scan through channels, whereas now it is not only on demand, it is presented to you so you easily find what you are looking for,’ Giuseppe Nuti, head of data science in UBS’s FX, rates and credit strategic development lab, told the FT.

‘That’s what we are trying to do for our clients, presenting them with a choice of likely, interesting trades.’

The technology is in its early stages of development but the algorithm is being trialled by UBS's corporate bond trading business with ambitions to carry it over to other asset classes as well.

Currently, the recommendations pass through UBS’s salespeople, who decide whether to pass them on to clients. However, this will eventually be phased out.

‘A good salesperson calls his or her client and goes over what they think will be interesting for the day. We are trying to automate that. It means the job of a salesperson, which in many ways has remained immune to the technology revolution, will likely change,’ Nuti said.

Nuti told the FT that having enough data for the system to process and produce reliable results is the real difficulty. 

Read our blog on how a 'Netflix-style' advice fee could encourage people to take up advice.

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