Presentation on theme: "Abcd Current Uses of Computers in UK Business and Industry Presentation to the Computer Sciences Course, University of Warwick by Simon Walkden Executive."— Presentation transcript:
abcd Current Uses of Computers in UK Business and Industry Presentation to the Computer Sciences Course, University of Warwick by Simon Walkden Executive Director, Information Technology UBS Warburg
abcd 1 Who Are UBS Warburg? UBS Warburg (www.ubswarburg.com) is the global investment banking, securities and wealth management business of UBS AG, one of the largest financial services organisations in the world. UBS Warburg specialises in delivering market-leading advisory, research, distribution and transaction execution services to corporate, institutional and private clients globally. UBS Warburg meets its clients' needs through six leading business areas: corporate finance; equities; fixed income; private banking; private equity (through UBS Capital); treasury products. Well known for technical innovation, UBS Warburg's initiatives in connectivity, straight through processing and real time delivery include individualised online research, advisory and transaction services for institutional and private clients. In January 2000, UBS Warburg were joint lead managers on the first ever bond to be marketed and subscribed via the internet, using their DebtWeb facility, one of a suite of e-commerce sites developed entirely in-house.
abcd 5 Demand for Client Connectivity is Growing 0 10 20 30 40 50 60 70 199920002001 0 10000 20000 30000 40000 50000 No. of systems in use directly by clients Registered Clients
abcd 6 Raw Statistics 18,000 Full-Time Equivalent Employees 25,000 People engaged in an employment type relationship 50 Countries — 23 Europe, Middle East and Africa — 13 Asia Pacific — 14 The Americas Headquarters is in London – 6,000 FTEs Parent Bank is in Switzerland
abcd 7 Immediate Implications for IT We have our own world-wide network Require an international language standard desktop, principally European but also Asian Languages Electronic mail, IRC ‘chat’ and video communications over the network — OpenMail, Interchange, Avistar Integration with travel services! IT must service remote working Core systems have to be multi-currency, multi-legal entity and sometimes multi-lingual (though the Bank’s standard is English) Global focus
abcd 8 Managing the “IT Factory” 5,000 technologists 891,000 help desk calls 7,000 market data users 227 sites supported 3,000 major releases per year 41,500 client server devices 60,000 ports 2,000 hubs 400 routers 5,500 UNIX servers 1,800 NT servers 1,300 MIPS Availability management Monitoring and reporting Full unit pricing
abcd 9 Distributed Computing Costs Trends.xls*Trends?Chart 15 SpecInt=Unix MIP In 2001 SCM Programme saved US$15.2mm in capital spend and depreciation US$ mm 19992000200120022003 Capital Spend66.2 62.2 49.0 44.0 39.0 DepreciationN/a 84.0 76.2 55.7 49.0
abcd 10 Out-sourced E-mail September 24.XLS*Page 11?Chart 1 RTB costs will decrease from US$20mm in ‘99 to US$5.5mm in 2002 (for like for like services) A pilot Exchange 2000 infra has been installed and we are planning to complete the full migration by the end of Q1 2002 Outsourcing arrangement is based on a unit cost with a downward sliding scale for additional volume as our demand increases
abcd 11 UBSW Network Costs versus Bandwidth Cost / Bandwidth ratio is decreasing about 5% per month. Increasing demand for bandwidth due to applications with larger appetite for bandwidth plus migration of traffic from traditional carriers to internal network. Increased use of voice/data with UBSWNet saves additional money compared to traditional carriers, bandwidth efficiently shared.
abcd 12 IBM Mainframes Consolidation ‘Drastically cuts total and unit costs while......migrated to world class technology’ 1000 MIPS Peak Utilization Old Technology in 4 Locations:London, Stamford, Singapore, Frankfurt Questionable Disaster Recovery 2000 MIPS Peak Utilization World Class Technology and Performance: IBM’s Z-900 Processors, EMC’s 8700 Series Storage Solid Disaster Recovery 19992002
abcd 13 The Last Decade of UBS Warburg Swiss Bank Corporation O’Connor Associates Swiss Bank Corporation Swiss Bank Corporation SBC Warburg SG Warburg Dillon Read SBC Warburg Dillon Read UBS Warburg Union Bank of Switzerland PaineWebber 1993 1995 1997 1998 2000
abcd 14 The Implication of History on Computing IT Solutions can be amongst the reasons for acquisition (e.g. O’Connor) You get to do a lot of systems integration work! Learn your end to end business processes and decide your solutions on that fit - otherwise the systems integration gets horrendous. You have to have all embracing technical standards, because somebody you acquire will have brought the technology in.
abcd 15 The Business Constituents Equities, e.g. — Securities (Stocks): Ordinary Shares, Preference Shares — Convertible Bonds — Derivatives: Options, Warrants, … — … and Research Fixed Income, e.g. — Government Bonds — Corporate Bonds — Interest Rate Swaps... Treasury Products, e.g. — Foreign Exchange — FX Options — Overnight Money Markets... Corporate Finance — Mergers and Acquisitions — Initial Public Offerings (IPOs) — Leveraged Finance… Private Equity — Venture Capital Private Banking — Wealthy Individuals
abcd 16 Corporate Finance and Private Equity The impact of the Internet has altered the relationship between the IT Department and these Business Units Supplier (Conventional) — supply a system that list major shareholders in UK listed companies Partner (New Opportunities) — sell the application as a hosted service to listed companies in the UK — create internet application for online application for new issues Advisor (New Economy) — due diligence technology reviews on companies in which we invest capital and private equity — give leads on small technology companies who are considering flotation (IPO)
abcd 25 DealKey - Online Application for New Issue
abcd 26 Equities, Fixed Income and Treasury Products Equities, Fixed Income and Treasury Products is execution business, rather than advisory business (cf Corporate Finance) The execution is an extended process from the order, through execution, through settlement, to booking Overriding requirement is to manage risk, as risk is where the Bank’s profits are made or lost Specialised business systems, working ‘straight through’.
abcd 27 Straight Through Process Sales and Order Systems Risk Management Systems Settlement Systems Risk Control Systems Financial Control Systems Trades Aggregates Trade Valuation, Revaluation Trades Settlements
abcd 28 Risk Systems Sales and Order Systems Risk Management Systems Settlement Systems Risk Control Systems Financial Control Systems Trades Aggregates Trade Valuation, Revaluation Trades Settlements
abcd 29 Risk Management The price of shares can go down as well as up! In the course of servicing customers dealing in Stock, Bond and Money markets, UBS Warburg holds stocks of these products Risk management goes through, asset by asset, the impact of market fluctuations — market movement calculations can be complex for synthetic and derivative products — profits and losses arising from market daily movements are booked in the company accounts — impact of market movements and trends in exposure are reviewed to influence proprietary trading activity — balancing trades in the derivatives markets are made to hedge or offset risk Micro-level management of risk
abcd 30 Risk Control Macro-level management of risk Alignment of the investment bank’s capital and policies to the overall risk profile It monitors — market risk — counterparty risk — country risk — settlement risk — operational risk May introduce policy, e.g. limit trading over Year 2000 or in a specific developing country with internal monetary problems
abcd 31 Risk Systems Risk systems are therefore based on: — internal position keeping element — market price feed — mathematical models — reporting solution These are normally implemented on Sun Solaris servers. — Models are highly specific to products, therefore the applications become distributed by product. Those models are set up on compute servers written in c or c++. — Companies such as Reuters and Bloomberg have traditional market pricing services based on Unix and IP communications — Sybase DBMS is used for position keeping on the database server — The Unix comms server, compute server and database server work together to provide the risk system. — Windows client is used to look up results on the database server in a traditional client-server arrangement
abcd 32 Settlement Systems Sales and Order Systems Risk Management Systems Settlement Systems Risk Control Systems Financial Control Systems Trades Aggregates Trade Valuation, Revaluation Trades Settlements
abcd 33 Settlement Systems Record Trades Authoritative Statement of Settled and Unsettled Trades Trade Confirmation and Dispute Handling Settlement and Fails Handles Cash Flows through the Product Lifecycle — Dividends on Shares — Other Corporate Actions — Interest Payments on Bonds or Swaps — etc
abcd 34 Settlement Systems Transaction-oriented functionality today Typically mainframe based - CICS and DB/2 preferred Moving to workflow orientation Retaining mainframe orientation based on MQ series infrastructure and emerging products from IBM
abcd 35 Custody and Collateral Stocks, Bonds and Cash may all be used for collateral purposes Custody of customers’ stocks, bonds and cash may also be used as collateral Each may be leant to short-term borrowers for a fee — Overnight money market — Stocks for ‘short’ deals These systems lag behind in the globalisation of the investment bank’s processes and there is little consistency in the technology or applications used As this is being addressed, new applications are employing Java 2 Enterprise Environment framework — Enterprise Java Beans for positions, lending offers and borrow requests — Rendering through JSP and servlets
abcd 36 Financial Systems Here we move into the back office world Looking to purchase commercial products to fulfil business need Enterprise Resource Planning (ERP) software dominates Users of SAP software — SAP R/3 for financial accounting and management accounting — SAP R/3 for inventory management — SAP R/3 for projects, time recording and internal billing In 1997, investment bank had 42 different general ledger systems doing financial accounting and management. We have replaced 39 of these with a single instance global general ledger based on SAP R/3. Approximately 130 Business Systems Feed the General Ledger
abcd 37 Financial Systems Sales and Order Systems Risk Management Systems Settlement Systems Risk Control Systems Financial Control Systems Trades Aggregates Trade Valuation, Revaluation Trades Settlements
abcd 38 Global General Ledger System Rules Engine (Ac Posting Generator) Interface System (Ac Allocation/ Suspension) Ledger (Balance Sheets & Profit Centres) Warehouse (Regulatory Reporting) Accounting Entries Business Events Accounting Postings Static Data
abcd 39 Global General Ledger System Interface System - built in house; Solaris and Sybase Rules Engine - from OST Business Rules with UBS sponsorship; Unix and various DBMS and middleware adapters SAP R/3 - from SAP AG; Sun Solaris multi-domain Enterprise 10000 and Oracle DBMS Warehouse - co-developed with PriceWaterhouse Coopers; Sun Solaris E10000 Availability Requirement — Regulatory Reports must be submitted monthly in most countries and daily in the United States — Daily Business Unit Balance Sheets required — 4 Terrabytes Data
abcd 40 Technical Infrastructure for Stored Data
abcd Questions and Answers Current Uses of Computers in UK Business and Industry firstname.lastname@example.org