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UBS CEO: Banks need artificial intelligence to replace staff, cut costs

Facedwith low interest rates, more regulations and cybersecurity threats, banks haveno choice but to deploy artificial intelligence in order to stay profitable,according to UBS GroupAG CEO Sergio Ermotti.

"Wehave legacy systems, legacy technologies that are actually not able to keep upwith the complexity of the new regulations and the amount oftransactions," he told the Sibos conference in Geneva on Sept. 28."Without artificial intelligence you would not be able to keep up withthat complexity."

Oneof the main reasons why banks have struggled to attract investors in recentyears is the growing cost of back-office staff, Ermotti said. "There arefew banks in the world that are able right now to pay for their cost ofcapital, so eventually we need to find ways to get more efficient," headded.

TheCEO argued that artificial intelligence — that is, technology that enablescomputers to acquire knowledge themselves — can help solve this problem."Absolutely criticalfor us going forward is to embrace those technologies to create a decent amountof return for shareholders,"he said.

Thoughconceding that "some jobs will be eliminated" in the process, he wasoptimistic that after a period of transition, new ones would take their place."We need to train the next generation of bankers to work with data ratherthan be a victim of data,"Ermotti added.

TheSTOXX Europe 600 Banks index, which includes UBS among the largest listedlenders on the continent, has lost 25.83% of its value since September 2015,according to data from SNL Financial, an offering of S&P Global MarketIntelligence.