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CIO interview – UBS infrastructure services CIO Paul McEwen

Swiss banking giant invests in infrastructure again
UBS Infrastructure Services CIO Paul McEwen at the bank’s new London centre. Picture by Matt Gore, Icon Photomedia, part of Icon Business Media

On the seventh floor of the UBS headquarters in Moorgate, London hangs an enormous photograph of a glacier. The new office, resplendent in silver steel cladding looks like a recently calved iceberg.  Banking IT is referred to in glacial terms by some in technology and innovation circles, but UBS infrastructure services CIO Paul McEwen, looking fresh for someone who stepped off a flight from New York just hours before our interview believes, at least under his watch, that pace is far from ice age and that the Swiss banking group is setting the pace.

“Fundamentally UBS is a wealth management company,” McEwen says, explaining that the bank has different approaches in its native Switzerland to the rest of the business. “In the USA you have financial advisors bringing customers through the door. In Switzerland our customers are organic UBS customers”. Switzerland is also a “special zone” for McEwen and his peers at UBS, as customer identifiable data cannot leave Switzerland and he has a separate team operating customer identifiable data.

We meet McEwen at the tail end of a major infrastructure modernisation programme.  When challenged that the banking world has been reticent to invest in technology or perhaps just afraid to  discuss technology spend following the credit crisis of 2008, McEwen says banks had no choice but to ensure their revenues were used to meet new regulatory obligations.  

“We have to hold a lot of capital. From 2008 after the meltdown our investment banking had to become laser focused.

“In fact the US banks were investing in technology as they could get better prices, now they are slowing down,” he says as the cost of borrowing rises across the Atlantic.  

Global role

Infrastructure has become globalised within UBS under McEwen as he and the bank realise and embrace the view that infrastructure does not differentiate the business. “I’m responsible for infrastructure across the business, including the datacentres, networks, servers and the end user compute, only the applications are different across the individual business units,” McEwen says.  “We are trying to simplify and reduce the number of applications and trying to make sure that our applications are used right across the business.”

When McEwen arrived he found that infrastructure had had a series of different leaders and was in a poor state with a number of critical areas nearing or at the end of life. The Group Head of Infrastructure Services IT carried out deep review “looking at stability and the future and considering the user experience”. The strategy was also not about modernise and stop, but to create a map for UBS that charted infrastructure modernisation as a continual journey the bank will be on. McEwen says this is vital as technologies such as robotics and artificial intelligence (AI) are adopted into banking.

The end result is that infrastructure is now categorised and operated in two ways; bank IT and commodity IT.

“Bank IT is where we make a difference. Commodity IT is something that a supplier can run faster and better than I can,” McEwen says. He presented this strategy three months after joining UBS and given the green light to invest half a billion dollars over a three year period.

An example of the commodity model is that UBS now uses Storage-as-a-Service from Hitachi. “It is usage based billing,” he says.

McEwen has structured his cloud strategy to embrace as much flexibility as possible for UBS.  His reason being that he expects the bank and all organisations to churn between providers on a more regular basis in the future. “There will be many clouds, AWS, Azure, Bluemix and you will move around these.

To be ready for this McEwen and team had to prepare UBS as its legacy was “not cloud enabled or even cloud aware” so two internal clouds were developed; an Infrastructure-as-a-Service (IaaS) and Database-as-a-Service (DBaaS).

“We moved our old physical legacy onto the IaaS and rent that from HP right to the hypervisor. We had to do this because to go fully to the cloud you need to be standardised to ensure you can move,” he explains.  HP Cloud Service Automation was implemented as part of this strategic move, which McEwan says enables Dev teams to migrate and self manage. HP Moonshot integrated infrastructure was also adopted. McEwen also used his half a billion fund to subsidise business units to modernise their applications estate, which fulfilled the need to rationalise the number of applications as McEwen indicated earlier, but also got the estate cloud enabled.  The CIO says strong stakeholder management skills were essential.

McEwen says his infrastructure transformation has relied heavily on stakeholder skills, not just internally, but also in managing the supplier partners to UBS.  

“We got Citrix and Microsoft to do an agreement for virtualised Skype for business,” he says. “80% of this business in agile working space, so Skype was key to deliver the best end user experience.” In modernising the network infrastructure UBS partnered with Juniper rather than Cisco, though he opted for Cisco IP telephony, dropping a long standing contract with Avaya and 16 of the 23 datacentres he is responsible for have been upgraded and two closed down at the time of our interview.

A three year programme also meant a recruitment plan as McEwen required skills to carry out such a major transformation.  He says the majority came from the banking sector as he needed skilled and experienced staff used to this scale of project.

Like many of his peers, McEwen has been actively seeking and engaging with innovative new technology organisations.  

“We stay connected to smaller providers and provide some help,” UBS has bankers on the US West  Coast that keep a watching brief on the Valley he says.

Arago, a German automation tool has been embraced as UBS looks to rapidly increase the amount of automation within its IT operations and is an example, McEwen says of UBS adopting technologies from smaller providers.

Swiss banking giant invests in infrastructure again


There is much talk, especially in the warren of streets close to the UBS London office of Fintech and the disruption it could do to the financial services sector.

“Blockchain is very real. When will it be in our systems? My personal opinion is three to four years. Blythe Masters is behind it and if she sees something in it, then it is serious,” he says of the former JP Morgan boss who now heads up Digital Asset Holdings, a blockchain startup. “Like a lot of innovations it has yet to find its way and everybody is trying to work out what to do with it.

“Robo-advisors are the other disruption, not so much in our market, but it will be very disruptive,” he says of the online wealth management services that use algorithms to manage wealth portfolios without human financial planners. A year ago at the Gartner Symposium in Barcelona the international technology advisory company focused heavily on how algorithms will take control and automate major parts of many organisations and suggested that CIOs needed to be considering an algorithm strategy. Robo-advisors use, on the whole, the same software as existing human portfolio managers, but using the algorithm automate the process and make the human middle management role redundant.

McEwen says of the innovation focus at UBS: “We have a central CTO group that look at new technologies and take the perspective of ‘do we have a problem that we need to solve?’”

Cyber-security follows Fintech closely as the major topics of financial services debate.  McEwen joined UBS in March 2014, in June of that same year his previous employers JP Morgan Chase suffered their largest cyber-security attack.  Financial services industry watchers claim the JP Morgan Chase attack was successful because during 2014 JP Morgan haemorrhaged technology leadership talent to rivals. McEwen would only say that the intrusions happen because of the skill of today’s hackers.

“JP Morgan, the FBI and T-Mobile are not easy organisations to attack,” he says.  It is widely believed that the large amounts of customer data stolen from JP Morgan found its way to Russia.

“The challenge around security is how quickly you can find them when they are in your systems. That is where data becomes so important in terms of tracking.  As the Internet of Things becomes more widely available a DDOS attack could come from 100,000 fridges.

“Banking is always changing,” McEwen says of the sector he’s always worked in. “I’m a technologist and I understand banking very very well and I’m fortunate to love what I do.

“The support from the board has been amazing,” he says of his two years and a half years with UBS. “The culture of UBS is very different from the US banks I have been with, so this was a chance to learn something new,” his previous roles had been with retail banks JP Morgan and Citigroup.


Widgets Magazine
About Mark Chillingworth 220 Articles
Mark Chillingworth has over 20 years of journalism and editing experience across all media platforms including online, live events, print magazines and television.
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