UBS Chief Operations and Technology Officer Mike Dargan expressed confidence that the integration of Credit Suisse’s complex systems is progressing as planned, following a successful test migration of clients and data. This comes as UBS embarks on the challenging second phase of its acquisition of the fallen rival, initially secured in an emergency deal last year.
Chief Executive Sergio Ermotti has previously highlighted IT integration as a significant risk to UBS, noting that any delays could jeopardize the bank’s anticipated cost savings. In a recent interview in Zurich, Dargan confirmed that UBS successfully tested the migration of hundreds of Credit Suisse clients from Hong Kong and Singapore. “We put a couple of hundred clients of different complexities through a test case in September. This went very well. The entire floor was applauding. There were tears,” he remarked.
Looking ahead, UBS plans to begin migrating clients from Luxembourg and Hong Kong in the coming weeks, with Singapore to follow, and additional migrations set for 2024 and beyond. The bank aims to transition a total of 1.3 million clients. Dargan described this as “the largest migration of data as part of an M&A transaction in financial services, if not the biggest overall,” emphasizing that the technology integration is “bang on target.”
Investor sentiment remains positive regarding the largest banking takeover since the global financial crisis, with UBS shares rising nearly 56% since the announcement of the Credit Suisse acquisition in March 2023. However, the complexity of the IT integration poses risks, with historical precedents like Deutsche Bank’s protracted integration of Postbank serving as cautionary examples.
UBS is tasked with migrating approximately 110 petabytes of data from Credit Suisse—equivalent to 500 billion pages of printed text. The integration involves managing around 3,000 applications, 100,000 servers, and 16 data centers from Credit Suisse. Dargan reported that UBS has already decommissioned about 560 applications, transferred 13 petabytes of data, and shut down 40,000 servers. “We are pretty much on target for applications and ahead on servers,” he added.
With a workforce of about 110,000 at mid-year, UBS plans to reduce the reliance on external contractors in technology and operations. This strategy aims to retain the majority of Credit Suisse’s permanent employees and increase the proportion of internal staff from 60% to 85%. While the integration may result in a total headcount reduction to around 90,000 by 2026, the bank continues to prioritize internal resources as it navigates this complex transition.
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