I wonder how that breaks down between Credit Suisse and USB workforce. My guess Credit Suisse people will be the unlucky ones, with the execs being let go getting a nice big bonus.
USB got what it wanted, the Assets and probably a nice restructuring for the liabilities. So it will get rid of everything else from Credit Suisse :(
This very much looks like it's a deal that UBS did not in fact want and was pushed upon them and as a result they got a lot of things they did NOT want and that puts them into a weaker financial position.
One thing I don’t understand about bank mergers is the psych aspect of IT workers. The merger has to be very challenging and tedious from a software perpsective and I can’t imagine being invested in it if there is a good chance I will be laid off after the it merger is completed.
Depending on the deal, there's often less integration work than you'd expect.
Buyer, or in the rare case target systems are deemed better, accounts & flows get ported over and the other side is simply shut down.
Generally they do not do a micro system-by-system comparison and then try to integrate them into a best-in-class Frankenstein sum of the parts.
On first pass it may seem short sighted and that they may lose good tech, but given the 1000s of systems this exercise would take forever.
Further due to all the dependencies, you really can't pick and choose anyway.
In this particular case it would also be pretty hard to argue CS is better that anything (other than losing money) than UBS anyway. CS has been on deathwatch for the last 10 years, at least..
Even without a Frankenstein solution I imagine it is very difficult, tedious, and cumbersome. Two banking cores will be wildly different and there aren’t very many open banking specifications. Not to mention that there are tons of bespoke business rules and drastic differences in how they are implemented. Also differences in the software will be derived in variances in how each banks lawyers understand the legal regulations.
I’d imagine it is probably like merging two spider webs together.
Yea I know from experience of one 2008 merger where they simply cut over all clients to other firms systems the next quarter and powered down the losers data centers.
I might have a bit of insight here. I work in a bank that has a lot of history. In practice, the IT infra is never truly merged (it takes 10+ years to migrate some components), not the functional components at least. There are bridges to connect some things so that reporting is deemed acceptable for the central bank/regulators.
If you come to one of the big banks and just look at the technical components, you can delineate the history of each merger/acquisition from that, going back 30-50 years.
A thing that shocked me: a lot of systems have a weird nationalistic twist to them (at least the old ones), so if you work in non-US, you will see systems that do not speak english in their API, but french, dutch, german, etc. all in the same bank. This is...problematic, especially since they usually use weird text encoding and not something like UTF-8.
UBS needs so long to take a shit that there's hardly room for their next meal. I have no confidence that they even can pull this off, particularly if it involves haemorrhaging half the combines workforce in a desperate ploy to remain solvent-- IT psych, internal politics, or other challenges notwithstanding.
When UBS and Swissbank merged, the international businesses’ systems were “integrated” for the most part by trading positions across. UBS systems were mostly switched off in favour of their corresponding Swissbank systems.
In Switzerland it will no doubt be more complicated, but elsewhere I wouldn’t be surprised to hear the same thing happen again.
USB got what it wanted, the Assets and probably a nice restructuring for the liabilities. So it will get rid of everything else from Credit Suisse :(