Energizing finance: digital transformation of an “always on” industry

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“Technology is now [about] how our customers experience banking, whether through an app or a digital service,” says Mike Dargan, Group Head of Digital and Information and Member of the UBS Board of Directors. “As a natural consequence, technology is now an integral part of our business – it has a place at the table and is part of our business strategy.”

A cloud-based future

Cloud computing is driving the financial services industry’s transition to an “on-demand” data and services industry, where companies pay specialist providers for storage and infrastructure when the need arises. actually feel. These specialists are often the cloud service arms of Microsoft, Google and Amazon. Only these technology companies, with their global networks of giant data centers, have enough computing capacity to meet the ever-increasing demands of the financial industry.

“If you look at all the new requirements coming from central banks, governments or even investors, financial services companies don’t have the data storage capacity to meet the needs,” says Scott Guthrie, executive vice president of Microsoft Cloud + AI. Band.

As banks adopted the technology in the 1970s, they developed their own infrastructure, often installing servers in their data centers. The traditional system worked well when the computing demand was relatively uniform. But in times of intense market volatility, when demand for computing power exploded, banks had to ensure that spare capacity continued to grow, even if it was redundant most of the time.

“We often talk about the scalable and elastic nature of the cloud,” says Dargan, referring to the idea that if a bank’s computing power demand exceeds its normal level, its cloud partners can provide additional capacity instantly and only charge for the time it is. This not only saves money, but also reduces carbon emissions, as unused capacity is aggregated for the entire industry at the cloud service provider level, rather than maintained by each company. Reliability and availability are also improved because cloud providers have multiple data centers that can back each other up. Dargan says UBS achieves over 99.999%, or sixth sigma availability across all of its fleet, in part thanks to the move to the cloud.

Cloud providers not only offer storage and infrastructure, but also platforms and tools through which applications and services can be developed. Since Dargan joined UBS in 2016, his technical teams have gone from using 50 different development tools to one cloud-based service they launched called UBS DevCloud. Through this open ecosystem, built on the public cloud, UBS software engineers have a seamless experience to develop, test, and release code within a single tool, enabling them to quickly launch products and update them often.

The cloud also enables financial services companies to combine the best consumer applications and develop exceptional services for customers. “The best consumer apps you use every day know exactly what you click and don’t click, and exactly what their recommendation engines are doing. This means that they can improve their functionality very quickly. Applying the same in our industry can be a game-changer for our customers,” says Dargan. Such a desire to improve customer service, often amidst competition from competing digital-only start-ups, was an early driver of cloud computing adoption by financial services, Guthrie says. “Financial services companies wishing to [provide] mobile or online, digital consumer services were one of the first sources of migration to the cloud. »

Cultural evolution

For an industry that pioneered the large-scale application of computing through in-house infrastructure, the shift of financial services companies to the cloud is a significant generational shift. This naturally leads to some caution.

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