UBS Group AG invested in onboarding technology through enhanced know-your-customer and anti-money laundering processes in the first quarter, which will ultimately aid the bank’s onboarding of Credit Suisse clients during its acquisition of the embattled Swiss bank. 

UBS’ tech spend was up 11% year over year to $322 million, with included enhancements to its KYC and AML onboarding programs — including new technology, monitoring and analytic capabilities — which will help the bank bring Credit Suisse clients onto the UBS platform, according to the bank’s Q1 earnings supplement.

“The onboarding will be done in a pragmatic way,” UBS Chief Executive Sergio Ermotti said today during the bank’s earnings call. “Unless we have red flags, we will onboard clients we want to make the journey and experience of clients as smooth as possible. As we onboard clients, we will then look at the suitability and make sure that they fit into our standards.” 

BIGGER PICTURE: The increased technology investments have been part of the bank’s digital transformation initiative since 2020, UBS Chief Financial Officer Sarah Youngwood said during today’s earnings call. 

“Consistent focus on our digital transformation continued to pay off; we saw an 11-percentage point increase YoY in the share of personal banking clients that are active mobile users, which benefits our clients and creates operational efficiencies,” she said. 

For example, active mobile users reached 1.6 million, an 11% increase YoY, and active digital banking clients grew 4% YoY to 2 million, according to the earnings presentation. 

BY THE NUMBERS: UBS reported for Q1: 

• Total revenue fell 7% to $8.7 billion; and 
• Acquisition-related costs were a reported $100 million. 

NOTEWORTHY: UBS appointed Ermotti as chief executive effective April 5, with previous UBS CEO Ralph Hamers staying on in an advisory role during the transition. Ermotti had previously served as CEO for UBS from 2011 to 2020, according to the bank’s website. 

In addition, UBS Chief Risk Officer Christian Bluhm has agreed to remain with the bank due to the acquisition of Credit Suisse after previously planning to step down, according to the earnings supplement. 

FUTURE LOOK: With the acquisition of Credit Suisse expected to be finalized in Q2, UBS has a three- to four-year integration period ahead with significant challenges integrating Credit Suisse’s technology into UBS’ processes being expected, Forrester Research Vice President and Principal Analyst Jost Hoppermann previously told Bank Automation News. 

“If a bank wants to eliminate redundant systems, they first of all have to make sure that they cut the right functional footprints out of the application landscape,” he said, adding that UBS will need to address its governance, risk and compliance solutions moving forward to make the merger a success. 

The merger will make UBS an estimated $5 trillion financial institution, prioritizing risk management, Ermotti said. 

“Our strategy, capital strength, risk management and culture are what have put us in a position today to deliver solid underlying results against a challenging market backdrop,” he said. “All of these factors will also play an important role as we deliver on our integration plans.” 

Editor’s Note: All amounts in USD 

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