For the first time, UBS is lifting the veil over its ongoing IT costs - they are enormous. UBS-COO Axel Lehmann explains why the big bank is spending billions on this.

«IT spending is at a record level and accounts for over ten percent of the revenues generated,» said Axel Lehmann , COO of UBS, in an interview with
the «Business Insider» news portal .

The UBS Group's business income amounted to around 28.3 billion Swiss francs in 2016. According to Lehmann's statement, the Swiss bank thus provides CHF 3 billion for its IT.

It is well known that UBS is raising large sums of money for IT. However, as yet, they have never been given precise details - until now by COO Lehmann.

Robots and Artificial Intelligence

On the one hand, the expenditures are due to the outdated IT infrastructure. On the other hand, the funds flow into new technologies and above all in Fintech cooperations, as Lehmann explains.

UBS recently bought into the American Fintech iCapital Network, with the aim of bringing more efficiency to the alternative plants sector, as finews.asia reported.

However, the investments in IT are due in particular to the prevention of risks to the core business of financial institutions, which sees bankers like Lehmann from the outside. «There are alternative business models that have the potential for big upheavals and can erode our business.»

The concrete changes Lehmann sees coming are from the fields of robotics and artificial intelligence (AI). «I am deeply convinced that robotics and artificial intelligence will fundamentally change the banking business over the next four to eight years,» said Lehmann.

A People's Business

The focus is on the analysis of Big Data. The better the financial institution understands the needs of customers, the more individual services can be produced.

Investments in new technologies also have an impact on the staff. However Lehmann will not to speculate if UBS has more or less people. «We’ll have different jobs and the skill levels of those people will be different,» he said.

«Banking remains a people's business,» the 58-year-old is convinced.