Building great digital customer experiences with agile infrastructure

Building great digital customer experiences with agile infrastructure

As more business, shopping, and banking is done online and from, well, anywhere, customers increasingly expect high-quality digital-first services that remove the need to go into a physical store or bank.

“People were working from home, shopping from home, banking from home, and are more tech and digital savvy than ever,” says Mike Dargan, group chief digital and information officer for UBS. “If you look at the financial industry, the ecosystem keeps evolving so it becomes more competitive and open, connected, as well as location-independent every single day

Banks such UBS are undergoing a cultural shift that makes technology integral to their business offering. The quality of the digital customer experience is crucial to the business’s value. Technology is often the first or only medium customers interact with a business. Dargan explains that to make that digital-first experience a competitive advantage for a business it requires significant and strategic investments in tech across the enterprise.

Investing technology means focusing on the people and platforms that create customer-facing experiences. It is not about building the feature of the month. Dargan’s roadmap begins with engineering excellence–attracting and retaining engineers who want to shape the direction of the industry.

Companies that want to attract and retain the best engineers need to provide cutting-edge platforms, tools, and culture to ensure a top-notch developer experience. UBS has invested over a decade in upgrading legacy systems to new technology. This has allowed them to offer a better service to their clients and reimagine the services they offer.

The speed and quality digital innovation is driven by internal company processes. At UBS, process focus has included training on agile methodologies–teaching employees from all business areas how to get from emerging requirements to high-quality outcomes as quickly and iteratively as possible.

Less obvious, longer-term investments into the technology future could also pay dividends in terms of customer experience and business terms. UBS has partnered up with the Green Software Foundation in order to create software standards and best practices for reducing carbon emission. UBS has also set a goal to achieve net zero greenhouse gas emissions throughout its operations by 2050.. Dargan says, “The world is faster, digitaler, and more data-driven that ever before.” Clients demand services that are digital-first and can be accessed anywhere, anytime and with the best technologies. In fact, I’d say tech is really how our clients experience us every day.”

This episode of Business Lab is produced in association with UBS.

Laurel Ruma: From MIT Technology Review, I’m Laurel Ruma and this is Business Lab, the show that helps business leaders make sense of new technologies coming out of the lab and into the marketplace. Our topic is digital first services in finance and banking. Every company needs to be a tech company today, even banks. Clients are demanding digital-first services as the financial industry is constantly changing. To meet these needs, the priorities have changed to invest in technology, hire top technical talent, and focus on hiring.

Two words for you, engineering excellence.

My guest today is Mike Dargan who is the group chief digital officer and information officer at UBS and a member on the group executive board. Mike is the leader of the team in technology, real estate and operations. This podcast is sponsored UBS.

Welcome, Mike.

Mike Dargan: We are very grateful. It’s great being here.

Laurel: So, UBS is focused on making technology a differentiator, and there seems to be a cultural tech transformation taking place inside the firm. How important is it that IT has a seat at a table?

Mike: It’s great that you’re here, and it’s great doing this. If we look back, I believe tech is central to our strategy. It is one of our five strategic imperatives. While it is an enabler, we want to make it a differentiator. Technology is an integral part our business and a key factor for value creation. To do that, it is important that tech has a seat at the table. It is part of the strategy and part of the dialogue.

In addition, I would say the world is faster, more digital, and more data-driven than ever before, so clients really do demand services that are digital-first, anytime, anywhere, and are underpinned by first-class technologies. In fact, tech is how our clients interact with us every day. COVID actually accelerated this trend. People are now more tech-savvy and able to work from home, shop from home, and bank from home. The financial services industry is constantly evolving. It becomes more competitive, open, connected, and location-independent.

Laurel: What are those current priorities for you and your team this year?

Mike: We’re really increasing our strategic tech investment. How can tech be a differentiator? We call it “leveling up technology”. This is what we are focusing on. Tech has many angles. There are many angles to tech. First, platforms that connect clients and ideas. Second, tools that improve the efficiency and effectiveness of our employees and advisors. Third, culture. So how can we foster accountability? How can we promote engineering excellence?

Leveling up focuses on five key areas. [email protected] is the first. Next, engineering excellence. Third, QBR, digital roadmaps and automation are the next. Let me quickly touch on each.

First, agile, how we move into an agile model for the delivery organization. At the beginning of April, 10,000 colleagues moved into our unified agile model, [email protected], that really helps us increase the speed from idea to outcome. By the end of this year, so by the end of 2022, we expect more than 20,000 employees to be working in that model. We have a playbook and an agile academy and are now transitioning people into the model.

Engineering excellence is something I’m really excited about. We must attract and retain the best engineers if we are to make tech a competitive advantage. We want to create the best engineering culture and provide our engineers with the most advanced dev platform. We want to have less engineers, but more productive and better engineers.

Next, QBR, and digital roadmap. Our tech portfolio is managed in a more strategic and flexible manner. We view it on a quarterly basis. Already in the first year, some large projects have been stopped. The QBR has served as a forum to discuss the most important objectives and ensure that we deliver more valuable and frequent outcomes.

Automation – Automation must be all that we do and all that we think about. It must be ingrained in the DNA of our firm and our DNA. This starts with how we develop and implement new technologies within the bank. Automating everything we do is a good idea. We should automate, if possible, any repetitive tasks. Another aspect is that we are introducing an AI data and analysis center of expertise. ADA brings together data scientists from across the company to ensure a consistent firm-wide approach to these topics.

And lastly, modern tech. Modern tech is almost an oxymoron but the bank of tomorrow does or will leverage a small modern tech estate. It must be cloud-based to allow us to be more flexible and provide best-in-class services. So, in 2021, we moved about 1,000 applications to the cloud and decommissioned over 500 legacy applications. If I think back we were 90% mainframe when I joined UBS, we’re now over 50% cloud.

Laurel: And you just joined UBS how long ago?

Mike: I joined in 2016, so over the last five, six years, we’ve been on that journey. It’s a continuation, but at a faster pace and with more focus.

Laurel: That is quite a pace. QBRs are quarterly business reviews.

Mike: Yeah, exactly.

Laurel: So, how does that pace of constantly reviewing your internal tech portfolio really help you stay on track?

Mike: This helps us to stay focused and ensure that we are reviewing the right things. QBR is performed in all business divisions. It’s also done at the GEB. We review our work regularly, we review the milestones, and we evaluate the results. It helps us to live agile and breathe agile.

Laurel: So, with agile being one of the keys to UBS’s future success, what are some exact examples of this and how is agile specifically helping to make stay ahead?

Mike : I think agile is the best way to work. You can simplify agile by removing some terms and so forth. It is moving from requirement to outcome as quickly as possible and iteratively, while maintaining constant quality. Agile working allows us to create products faster and provide clients with a data-centric, self-service experience.

To your point, I think there’s two examples I’d probably mention where you really see this come to life. We have significantly simplified testing and decreased delivery times in the investment bank ETD platform. Manual testing was slowing down our ability to deliver the right enhancements to ETD platform. With the agile approach, so a pod with people from a number of different disciplines automated more than 3,000 tests and reduced testing time from 12 days to just one overall. So, a huge, huge difference.

All for, on our wealth side, so DII, which is direct investment insights, this is one where we directly work on and with client feedback. One agile pod upgraded our investment content, linking the research from the chief investor office directly with trading ideas. This allowed us to get the execution on our online trading platform. This meant that clients had a better experience. They could access the content more quickly, and they received notifications on their preferred communication channels. And actually, in APAC alone, we saw about a 10% increase in clients trading online, and therefore online trading revenues as a result. This is a huge success. And then, agile is faster, more efficient, and better.

Laurel: Certainly measurable as well.

Mike: Exactly.

Laurel: You mentioned a strong emphasis on fostering an engineering culture and a culture of excellence. What are you doing to achieve this goal? How are your tech teams responding?

Mike: Our culture must be a priority. In many ways, banking is technology. But technology is people. First, we have a great culture. I am proud of who we are, UBS, and how we work. However, there are a few things we can do to improve our culture. One, people can grow and develop, two they experience new ways to work, three they feel comfortable being themselves, and four, they feel inspired and motivated every day by what and with whom they work. This is possible only if we create and nurture an inclusive engineering culture and provide our engineers with a dynamic platform environment that is state-of the-art. UBS is a place where engineers can work on the cutting-edge of tech, shape the industry’s face, and have a career that has different facets and solves real problems.

Now, I think, how does that look? I believe our engineers embrace change and are aware of the challenges that it brings. Although change can be hard, the results can be amazing. It takes time to change culture and mindset. People are used to working in certain ways. They need to change their work habits and learn how to be more agile and use new tools. It takes time and is challenging. However, we are already seeing positive results from the rollout of DevCloud, our agile approach. It is a transition. It is a change.

Laurel: And you mentioned earlier the agile academy being part of that and having 20,000 employees go through that. While some tech teams may be able to understand agile, not all tech teams can. So is the agile academy only for tech teams or is it for everyone in the company to understand how technology is making the company do things differently and why?

Mike: It’s a great question. Agile is not just for technology, and the 20,000 people is basically the entire change organization at UBS, so that’s both technology and folks in the business and functions who are associated with change. It must be both. There are product owners and others. You have the tech teams, the engineers, the testers, etc. It has to be all inclusive. Agile can be embraced beyond technology. How do you get from requirement to result as quickly as possible? This is agile. How do you do the right stand-ups? How do you get people into the right pods, streams, crews, etc. It doesn’t necessarily have to be agile. It could be recruitment or a variety of other things.

Laurel: You’ve equated an excellent engineering culture with some pretty significant return on investment for investing in technology, but how does it help your customers? What does it do for customer and client experience?

Mike: Ultimately, everything we do is to make UBS better, to make a better client experience, and to support those needs, we do need to attract and retain the best engineers, and make sure they have, as I’ve said, the best-in-class developer experience, and also, build cloud-native applications on a cloud-native platform. Cloud computing could be an example. Although it may not seem client-related, it is. Although I have mentioned some statistics, I believe it has been a catalyst for our tech growth over many years. This is a unique opportunity to reenergize our estate. It allows us to be more agile, it encourages us to reimagine, using one of the words in our purpose, how our application will be built for our client.

So then if I extend that. DevCloud, UBS DevCloud was launched two years ago. It is an open cloud ecosystem that allows all our software engineers to have a seamless experience from development, testing, and deployment. This not only speeds up time to market but also reduces costs, which is obviously good news for clients. With DevCloud, we can also constantly improve our apps, so they will never be 10 years old, but instead they will continue to be relevant.

Now, the biggest benefit as well of moving to the cloud is that things that used to take, say, five days, now only take one, which helps boost our engineers’ productivity and makes it a great place to work. We use a phrase quite often here that says, “All engineers and all developers wait at equal speed.” Anything we can do that will reduce their waiting times is value-added. We can provide the best experience for clients by having the best engineering talent and the best platforms.

Laurel: You mentioned cloud computing, and to create a more definitive timeline here, in late 2018 UBS announced a plan to make the firm more effective and efficient through cloud computing. Then as of February 2021, it was well ahead of that schedule, with 50% of computing happening on private and public cloud. So obviously, a huge transition, if you’re talking, just in 2016, about mainframes, but what has that shift to the cloud allowed the company to do?

Mike: Our strategy at the end was for a move to a cloud environment that was a third of . This was within four years. So, there was a third hosted on a private cloud, a thirst on public cloud, and one on mainframe. We wanted very clear objectives to transition and transform the company. And how we do that and what it means. We are on schedule for what we want to accomplish. Our cloud progress has prepared us for the unexpected. We’ve seen this through COVID and surge volumes. These surge volumes were due to some of these world situations. High trading volumes require more capacity. Cloud allows you to expand your capacity. At the same time, we were always able to ensure that business-critical applications are stable, and actually, our availability is above 99.999%. The five nines of availability are what really make us leaders in the financial sector.

Also, because we had our cloud-based employees set up, which we call A3, anytime, anywhere, from any device, which is now workspace, we enabled 95% of our employees to work from home. So, we saw more than 60,000 users logged in simultaneously, a huge increase in use of comms tools, so 3 million Skype calls a week. Cloud makes us more flexible, stable, and transparent. I believe cloud facilitates our interaction with other ecosystems. All of this is great news for our clients. This is something I keep repeating to my clients. Even if it doesn’t seem client-related, we can respond quicker to their needs and maintain security.

Laurel: Part of this initiative across the company to think more strategically about those tech investments, UBS recently joined the Green Software Foundation as a steering member, in part to support the company’s push also for net zero greenhouse gas emissions across all of its operations by 2050. How does the Green Software Foundation membership impact your decisions when building and deploying software programs?

Mike: Yes, it is a priority for UBS as a company and as a member of the GEB. There are thousands of applications across our global business. I believe one of our major steps in our evolution is to accelerate our digital transformation. But how can we do that in the right way? How can we make greener development principles an integral part of our future approach?

We’ve made significant progress in reducing carbon emission. This can include moving from on-prem data centres to the cloud or reducing or eliminating idle, power-hungry resource. We are also exploring whether carbon-aware applications can be used so that users can choose the lowest emission options. The Green Software Foundation is an amazing group. Partnering with them to share best practices and knowledge is part of our journey to reduce carbon emissions. We, together with others, can lead the way.

Laurel: What technologies are UBS investing in, and when do you look to buy a solution or technology out of the box versus building it yourself?

Mike: There is no right answer. I believe we need to both build and purchase technology, so we make strategic investments in selected tech startups. So again, let me take a quick step back. About two years ago, so in October 2020, we launched a 200 million strategic investment vehicle, called UBS Next. Effectively, it is an internal VC company. It partners with, and also acquires stakes, in early stage FinTechs as well as other tech companies. It has three main priorities. How can we help existing businesses grow? How can we challenge existing businesses? How can we improve our tech estate? We’re obviously looking for returns, but if there are new and more effective ways to engage our clients and deliver our services effectively, this is really exciting.

To give you an example of an investment, I took a stake at Trust & Will in the US. This platform allows you to digitalize and personalize an increasingly important part of wealth management, estate planning. This was set up in 2020, and we have a strategic partnership with Anthemis, a VC fund that I believe is one of the best in FinTech investing. 2021, We took a stake at ConsenSys. ConsenSys is a software engineering company in distributed ledger technology, DLT. We also took a stake at Endowus, a digital investment advisory firm based in Singapore, in 2021. Trust & Will was also founded earlier in the year. It is very simple. Our tech strategy works only if we both buy and build.

Laurel: Excellent. Mike, thank you so much for joining us today at the Business Lab.

Mike: Thank you very much. It was a great experience and I look forward to the next one.

Laurel: That was Mike Dargan, group chief digital and information officer for UBS, who I spoke with from Cambridge, Massachusetts, the home of MIT and MIT Technology Review, overlooking the Charles River. This is the end of Business Lab. I’m Laurel Ruma, your host. I’m also the director of Insights (the custom publishing division of MIT Technology Review). We were founded in 1899 at the Massachusetts Institute of Technology, and you can find us in print, on the web, and at events each year around the world. For more information about us and the show, please check out our website at

This show is available wherever your podcasts are available. We hope you enjoyed this episode and will rate us and leave a review. Business Lab is a production by MIT Technology Review. Collective Next produced this episode. Thank you for listening.

This content was created by Insights. Insights is MIT Technology Review’s custom content arm. It was not written by the editorial staff of MIT Technology Review.

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