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How cloud is keeping UBS ‘ahead of the game’

Nearly three years into its cloud adoption initiative, UBS is reaping an array of benefits while leveraging a “once-in-a-lifetime opportunity to change how we operate,” according to Mike Dargan, group chief information officer at UBS.

The leading wealth manager’s move to cloud, including Microsoft Azure, is enabling UBS to respond faster to its clients’ needs and maintain security, a cornerstone of the financial industry, Dargan says.

Cloud also has bolstered the company’s business flexibility – key most recently to managing through the pandemic – while also providing better outcomes for clients, increased agility for its engineers and the ability for UBS to reimagine how it builds applications, Dargan says.

Headquartered in Zurich, Switzerland, UBS began its work with Microsoft in 2017 and formed a strategic partnership with the company in 2018. UBS is pursuing a hybrid cloud setup with a third of its applications hosted in on-premises private cloud solutions, a third in the public cloud and a third remaining on its mainframe infrastructure.

A man in a black jacket, black pants and a white shirt stands with his hands in his pockets.
Tom Keane.

Microsoft launched two cloud datacenter regions in Switzerland in 2019, bringing Azure, Microsoft 365, Dynamics 365 and Power Platform to that nation. UBS was the anchor for that move, says Tom Keane, Microsoft’s corporate vice president for Azure Global.

“As you might expect, a global bank headquartered in Switzerland has incredibly high standards in terms of what they expect from the Azure platform, not just in terms of capabilities, but in terms of security, compliance and accreditation,” Keane says

“So the capability of our platform to meet the needs of UBS has allowed us to chart and validate at scale our roadmap in security, compliance and accreditation. We’re ensuring that Azure meets the needs of UBS. We’ve been on this journey and together advanced standards for the industry.”

As Microsoft continues to build its roadmap, the platform ultimately improves for Microsoft’s other financial services customers as well as for customers in restricted industries, like government, defense, health care and life sciences, Keane says.

But the partnership’s mutual benefits all begin, Keane says, with the fact that engineers from both companies are collaborating in Switzerland to build these solutions.

“When we created this partnership, it was something we really hadn’t done before,” Keane says.  “And with our engineers working with their engineers, we can work on what is needed technically; we can do it in their language, in their time zone.”

To learn more, Transform recently chatted with Dargan.

TRANSFORM: What are some of the highlights of your cloud journey, and where does UBS stand today as a result?

DARGAN: First, cloud is a key pillar of our tech strategy.

Sometimes, it’s too easy to think of cloud as just another place where we have software. But cloud represents a fundamental, once-in-a-lifetime opportunity to change how we operate. It enables greater agility for our engineers. It lets us reimagine how we will build applications for our clients. In a nutshell, it is a fundamental catalyst to enable a transformation of how we do things.

If I go back to 2018, when we defined our cloud strategy of one-third premises, one-third private cloud and one-third public cloud, we are well ahead with our cloud strategy.

We’re almost at 50% in the cloud, and this is part of our broader focus to maintain the health of our tech landscape. We’ve decommissioned over 2,000 apps in the last four years. We have over 600 tech components using the public cloud. As our expertise in migrating grows, we accelerate how we operate overall.

A man is seen from the chest up, smiling, wearing a blue sweater.
Mike Dargan. (Courtesy of UBS)

TRANSFORM: Microsoft launched two new data centers in Switzerland. What has that meant for UBS?

DARGAN: By helping to physically bring Azure to Switzerland, we unlocked more use cases for cloud services in our operations and for the industry.

TRANSFORM: Can you describe the most significant customer-facing business benefits that have materialized from your overall cloud journey?

DARGAN: Cloud makes us more flexible, gives us greater cost transparency and makes us available to interact with the ecosystem. All of those are great for our clients. We can respond faster to their needs and maintain security, as well as conduct better research.

TRANSFORM: Tell me about a scenario where UBS is putting cloud technology to use.

DARGAN: One of our use cases is the multi-entity-governed data platform. The way to think of this is like an Airbnb of data. It’s based in the cloud. It’s almost a big gravity pool for many of our apps moving to the cloud.

Now any financial services firm, like a bank, is a huge user of data. So having a data lake in the cloud, in a place where producers and consumers of content are able to get to it easily, is something we’re super excited about.

We put all our overall cloud initiatives underway pre-pandemic, and it shows you the importance of preparing for the unprecedented. Because of the cloud, because of what we’ve done, we were able to deal with high trading volumes amid that unpredictable and highly volatile market last year. The cloud made us flexible and able to deal with peak loads.

TRANSFORM: How has the cloud helped your employees to do their jobs remotely?

DARGAN: About 95% of our employees are enabled to work from home. We call it, “anytime, anywhere from any device.”

There is an interesting paradox in how we describe the world in which we live. We all talk about physical and social distancing, but we live in a world of digital closeness. We are having everyone log in to millions of Skype and (Microsoft) Teams calls, and we’re migrating the entire estate of UBS on to Office 365.

 

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TRANSFORM: How has this cloud journey, and the partnership with Microsoft, helped to differentiate UBS from its competition?

DARGAN: We were a first mover on the Swiss cloud. We are now roughly 50% on the cloud, between private and public cloud, which, without a doubt, is at the forefront of many European competitors.

TRANSFORM: What aspects have made the collaboration with Microsoft successful?

DARGAN: One is time. Our collaboration came at a rather early stage (of cloud adoption) compared to other banks. It’s important to stay ahead of the game.

Second, banking is and always will be a very regulated industry. So cloud principles, as well as the compliance and security requirements, are super important. That effective and successful joint journey does take time, but it also needs to be done in the right way.

What we did for the first two years was drive the base level of security and services. And then, at scale and pace, we drove the applications. But because we were committed to that journey, we were able to get the base level done.

TRANSFORM: How has the cloud improved security for your company?

DARGAN: Security is one of our biggest imperatives. The advantage of how we operate on the cloud is that we can patch once, and centrally, and not every machine one by one.

The regular operational activities of patching, of system updates, are now done on a more regular basis. But we do that in collaboration to make sure we have the latest updates. We’re delighted to be partnering with Microsoft on that.

For more on UBS’ cloud journey, visit www.ubs.com/digitalnext.

Top photo: Zurich, Switzerland beneath clouds. (Photo by Oliver Schneider/EveEm, Getty Images)