--- title: "Credit Suisse: 3,000 Applications and Counting" subtitle: "Inside the IT nightmare that keeps UBS executives awake at night" category: "Investigation" date: 2024-11-20 tags: ["Credit Suisse", "UBS", "Banking", "IT Integration", "Legacy Systems"] --- ## The Numbers | Metric | Value | |--------|-------| | Credit Suisse applications inherited | 3,000 | | Applications UBS is keeping | ~300 (10%) | | Applications being decommissioned | ~2,700 (90%) | | Integration budget | USD 13-14 billion | | Cost savings target | USD 4.6 billion (remaining) | | Swiss client migration phase | Q2 2025 – Q1 2026 | | Client accounts to migrate | 1.5 million | ## The Inheritance When UBS absorbed Credit Suisse in March 2023, they acquired more than a troubled bank. They inherited what one former Credit Suisse technology managing director described as institutional IT chaos: > "Pretty much every department at Credit Suisse built and maintained its own risk systems." Not one risk system. Not a unified platform. A sprawl of departmental systems—for prime, equity, rates, FX, credit, and various regional operations—each built and maintained independently. Three thousand applications. Decades of accumulated technical debt. No unified architecture. ## What Keeps Ermotti Awake UBS CEO Sergio Ermotti has been candid about the technology challenge: The Credit Suisse technology "keeps him awake at night." UBS is bringing over only 10% of Credit Suisse's applications. The other 90%—approximately 2,700 applications—must be decommissioned. If this migration and decommissioning don't go to plan, Ermotti warned, UBS's cost-cutting intentions may be thwarted. {{< irony >}} A bank that collapsed in part due to risk management failures maintained separate risk systems for each department, with no unified view of enterprise risk. The technology architecture reflected the organizational culture: siloed, uncoordinated, and unable to see the full picture until it was too late. {{< /irony >}} ## The Integration Challenge UBS faces what may be the most complex banking technology integration in European history: ### Phase 1: International (Completed) Relatively straightforward migration of non-Swiss client segments. ### Phase 2: Swiss Clients (Q2 2025 – Q1 2026) The critical phase: migrating 1.5 million Swiss client accounts from Credit Suisse systems to UBS infrastructure. ### Early Warning Signs Delays have already occurred. UBS postponed the transfer of some wealthy clients after earlier transfers of less affluent customer segments revealed operational issues: - Transactions requiring revision - Systems temporarily unavailable - Integration teams facing heavy workloads ## The Cost Spiral UBS initially budgeted USD 13 billion for Credit Suisse integration. They've since increased this to **USD 14 billion**. The bank has realized USD 8.4 billion in gross cost savings—about 65% of target. The remaining USD 4.6 billion depends largely on successful technology integration. If the Swiss phase encounters significant problems, those savings may evaporate. ## The Deutsche Bank Warning UBS leadership is acutely aware of what can go wrong. They've studied Deutsche Bank's Postbank integration—a cautionary tale of IT project failure: - Deutsche Bank attempted multiple times to integrate Postbank's systems - The goal was to decommission Postbank's IT by end of 2022 - Heavy delays and budget overruns pushed savings to end of 2025 - Three years behind schedule {{< irony title="The Parallel Systems Problem" >}} UBS cannot run Credit Suisse and UBS application systems in parallel for long: - Duplicated operations increase costs - Parallel systems raise the cost/income ratio - Operational risk multiplies with complexity - Every day of delay costs money But rushing the migration risks the operational failures already seen in early phases. Damned if they hurry. Damned if they don't. {{< /irony >}} ## The Cultural Factor Credit Suisse's IT chaos wasn't accidental. It reflected organizational culture: ### Departmental Autonomy Each business unit operated independently, building systems to serve immediate needs without enterprise coordination. ### Short-Term Thinking Systems were built for current requirements, not long-term maintainability or integration. ### Risk Silos The same fragmentation that produced 3,000 applications also prevented unified risk visibility—a factor in Credit Suisse's ultimate failure. ### Talent Exodus After the acquisition announcement, Credit Suisse technology managing directors began leaving. Institutional knowledge walked out the door with them. ## The Swiss Banking IT Reality Credit Suisse isn't unique. Swiss banking IT has structural challenges: - **Regulatory complexity**: Swiss and international requirements create compliance overhead - **Legacy dependency**: Core banking systems often date to the 1980s or earlier - **Talent competition**: Top technology talent has options beyond banking - **Security requirements**: Financial services IT must meet stringent security standards while remaining functional UBS inheriting Credit Suisse's IT mess is dramatic, but legacy technology challenges exist across Swiss banking. ## The Verdict {{< conclusion >}} Credit Suisse's 3,000 applications represent more than technical debt. They represent institutional dysfunction—a bank where departments built separate systems, risk was fragmented across silos, and nobody had a unified view of the enterprise. UBS now faces the challenge of decommissioning 90% of these applications while migrating 1.5 million client accounts without major disruption. The integration budget has already increased by USD 1 billion. Delays have already occurred. The technology integration is make-or-break for UBS's acquisition thesis. USD 4.6 billion in remaining cost savings depends on successful execution. The Deutsche Bank/Postbank precedent shows how badly such integrations can go wrong. Credit Suisse failed for many reasons—risk management, culture, regulation, market conditions. But the 3,000-application IT landscape both reflected and enabled that failure. A bank that couldn't unify its technology couldn't unify its risk view. And a bank that couldn't see its risks couldn't survive them. UBS has until 2026 to prove they can do what Credit Suisse never could: impose order on chaos. {{< /conclusion >}}
### Sources - [eFinancialCareers: UBS is fretting about Credit Suisse IT systems](https://www.efinancialcareers.com/news/ubs-is-fretting-about-credit-suisse-it-systems-and-credit-suisse-technology-m-ds-have-quit) - [eFinancialCareers: UBS has only scratched the surface of Credit Suisse's legacy technology](https://www.efinancialcareers.it/news/ubs-has-only-scratched-the-surface-of-credit-suisse-s-legacy-technology) - [CTOL: UBS Tackles Massive Credit Suisse IT Migration](https://www.ctol.digital/news/ubs-credit-suisse-it-migration-swiss-phase-billions-at-stake/) - [The Digital Banker: UBS on USD 1 billion quest to avoid Deutsche Bank's IT missteps](https://thedigitalbanker.com/ubs-on-us1-billion-quest-to-avoid-deutsche-banks-it-missteps/) - [Private Banker International: UBS delays migration of ultra-high-net-worth Credit Suisse clients](https://www.privatebankerinternational.com/news/ubs-delays-credit-suisse-clients-migration/)