UBS shared that it will be terminating its $1.4 billion merger with Wealthfront, which the company announced back in January 2022.
The tie-up would have helped the Swiss bank expand across the US and offset the impact of economic uncertainty in Europe. In addition, UBS could have leveraged Wealthfront's automated investment services to gain access to more millennial and Gen Z consumers, who make up a large proportion of wealth management clients.
"Lower tech valuations and worsening forecasts may have led to fears at UBS that its agreed-upon $1.4 billion price tag for Wealthfront was too high," said Will Paige, analyst at Insider Intelligence. "If so, UBS may believe expansion into the US and wealth management can be done more cost-effectively."
That said, now that the deal has been abandoned, UBS must find new ways to grow its digital technology and omnichannel experiences. What's more, as baby boomers hand over an estimated $30 trillion to $68 trillion to millennial and Gen Z consumers, UBS will have to think of alternative approaches to attract younger audiences.
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In a recent survey conducted by KLAS Research, all eight surveyed healthcare companies preferred Microsoft over Amazon Web Services (AWS) and Google for tasks such as care coordination and COVID-19 vaccine registration. According to KLAS, "The organizations likely went with Microsoft since it performed better when it came to executive involvement and strength of partnership."
However, AMS is still a formidable Microsoft Cloud competitor. About three-fourths of healthcare organizations polled said Amazon was on their shortlist of cloud providers, due to the company's ability to continuously innovate. What's more, AWS is well ahead of Google in the healthcare cloud market share, holding 24.3% of the $17.19 billion US healthcare cloud market, compared to Google's 8.4%.
And while Microsoft and AWS may be far ahead of Google in terms of healthcare cloud market share, "Google's recent partnerships could shrink that gap," said Erum Ahmed, analyst at Insider Intelligence. "As more healthcare systems seek out cloud providers and patient data volume grows, Google could become an attractive option for major health systems, as execs are on the hunt for more patient access tools," added Ahmed.
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