After spending most of his career getting used to the breakneck pace of the trading floor, Michael Urciuoli was offered a challenge that took him out of his comfort zone. A few years on, he’s transformed not just technology at the giant asset manager, but its culture as well. By James Rundle with photos by Timothy Fadek
In February 2014, Michael Urciuoli, then head of capital markets technology for JPMorgan’s investment bank, received what he describes as an “interesting” proposition from his superiors. During his five years at the bank, he’d overseen a complete overhaul of its electronic equities franchise and built out its prime services business into one of the most competitive on the Street. Now, JPMorgan wanted to know, would he be interested in doing the same thing as the chief information officer for its Asset and Wealth Management business?
Urciuoli is the first to admit that he had to take some time to think about the offer, and whether his style of management would mesh with the more traditional, slower-paced buy side. “Coming to Asset and Wealth Management, I had a little hesitation,” he says. “I’ve always lived my life in—and love—the fast-paced and aggressive environment of a trading floor, so I was concerned about whether this was going to be the right fit for me. The buy side has a reputation for moving slowly.”
Ultimately, he took the plunge. For him, it was yet another example of stepping out of his comfort zone and into something entirely new, a process he’d undergone many times before in his career. Besides, he figured, just because he was leaving the trading floor of the investment bank, it didn’t mean that he had to leave it behind entirely. The move proved to be a good one, and Urciuoli says he “felt like part of the business from the beginning.”
Almost immediately, he made his mark on the group, and by the end of his first year, he’d designed and announced two major technology overhauls for both sides of the business, in the form of the Connect and Spectrum platforms. “My mindset was to bring the investment banking pace to Asset and Wealth Management, and it was kind of a whirlwind for them. I got the nicknames fairly quickly,” he admits. “I actually got a lot more support than I expected early on, but it was shocking to them to have someone who was new to this business proposing long-term technology strategies for both businesses. Also, proposing a strategy in the active management space is really getting at the heart and soul of what we do, and it’s probably the most sensitive area.”
Despite the intensity of his approach, it was hardly the first time that Urciuoli had pulled this manoeuver.
Born in 1961, Urciuoli came from what he describes as “humble beginnings.” Growing up in Bayside, a middle-class neighborhood in the Queens borough of New York City, he did well at Cardozo High School, and was set to be the first of his family to attend college. He applied to Harvard, MIT, RPI, and Princeton—and got into all of them, eventually deciding to pursue his studies at Princeton. He had an affinity for math, and assumed, in his words, that he’d go into that field after majoring in it. But during his time in New Jersey, he “fell in love” with computer science, and eventually chose to major in that subject instead. He graduated magna cum laude in the class of 1983.
In general, I have found throughout my career at Lehman Brothers and beyond, the technologists that have strong subject matter expertise have a much higher probability of building the best systems.Michael Urciuoli.
From there, he spent a number of years in computer consulting, until he started working at Lehman Brothers in 1989. It was at the bank that he found his real calling—a fusion of his love for math with his passion for computer science. He quickly began to move up the ranks, and across asset classes, first into foreign exchange, and later, as he became more senior, he was asked to move to London in 1994 to become the firm’s European head of fixed-income technology. After spending three years in London, he was recalled to New York as Lehman’s global head of fixed-income technology.
Further change beckoned after that, however, when his boss, Bart McDade, moved over to the bank’s equities division and brought Urciuoli along with him. The experience was different to anything he had done before. Equities was a relatively small part of Lehman’s overall trading franchise at that point, generating around $1 billion in revenue—numbers that were dwarfed by its fixed income and derivatives operations. Still, Urciuoli found the opportunities to be practically boundless for someone in his position, as a technologist with a strong math and business bent. “What happened in equities at Lehman, I think, was game-changing in my career,” he says. “It became apparent that being a partner was much more effective than being a service provider. So it actually became like I had a seat at the table in equities—I sat on the trading floor and I was much more in the flow of the business than I had experienced in the past.”
Sell Side to Buy Side
Lehman Brothers collapsed in September 2008, at the height of the global financial crisis, despite 11th-hour attempts to stave off the market impact of a major trading bank filing for Chapter 11 protection. While McDade—now COO of the firm—sorted through the aftermath, Urciuoli found himself with two opportunities: one at Citi, and another at JPMorgan.
Initially, he chose Citi. But JPMorgan never gave up, and continued to improve its offer to him. Eventually, it became something that he couldn’t refuse, and despite it being a “tough decision” to leave Citi after a matter of months, he became head of capital markets technology at JPMorgan’s investment bank in August 2009. Almost immediately, he found himself confronted with a familiar problem. “When I got there I saw the equities business did not have a competitive electronic offering. It was a very successful equities business at the time, but it was a high-touch, research-oriented business, and the primary goal for many years became growing the equities electronic and the cash business,” he says. “And so, a key area of focus for me was bringing in a team that could really upgrade the tech, and now I had the experience coming from Lehman Brothers and having just done that.”
It wasn’t long before JPMorgan became a titan in electronic execution, sweeping industry awards and gaining global plaudits for its technology. The key to the success of the project had its roots in the lessons learned from Lehman’s early experiments in equities. “In general, I have found throughout my career at Lehman Brothers and beyond, the technologists that have strong subject matter expertise have a much higher probability of building the best systems because they can eliminate the translation error,” Urciuoli says. “What you’re asked for, and what you think you’re being asked for, is not always what is needed. And so you can differentiate that and that’s a critical aspect.”
Those historical lessons would stand him in good stead a few years down the line, when he moved to JPMorgan’s asset management branch, and applied his fast-paced, aggressive approach to technology reform to the business.
Although JPMorgan Asset and Wealth Management is a relatively small part of the overall bank—it accounts for about 12.5 percent of the firm’s revenues—it’s an enormous business in its own right. If it were a separate entity, it would be a Fortune 500 company (number 237, to be precise), and it has a billion-dollar tech budget. As such, Urciuoli recalls, he was surprised when he came on board that the technology business was nowhere near where it needed to be. “The front-office relationships with technology were broken. There was no doubt about it,” he says. “There was poor communication, we had teams of people writing specs, it was strictly Waterfall and it was not productive. It was siloed. And so my first approach was changing that.”
Urciuoli began this change along three fronts—systems, culture and practices. On the first front, he began work on plans to roll out the Spectrum and Connect platforms, which would underpin a multi-year transformation plan for for the group’s technology on both sides of the business. The stakes are appropriately high.
“Asset and Wealth Management is making a big bet on technology for the future with more than half of its $1 billion tech budget targeted for investments across Spectrum, Connect and the Digital Client Platform,” he says.
Changing the culture of a large organization is hard and takes time. It is a battle you must fight on many fronts.Michael Urciuoli.
The second involved a change in habits, and the reversal of previous decisions that had resulted in the further estrangement of technologists from business personnel. “We now have tech staff co-located with portfolio managers, and that was a change,” Urciuoli says. “They were moving away from that but instead we pushed for more co-location. When senior management saw the correlation between co-location and success it became apparent that this was a valuable thing. As a result, we completely changed direction.”
Indeed, the idea of putting technology firmly in a partnership role was something Urciuoli had employed to great effect at Lehman, and at the investment bank. Here, though, it required something more. Almost immediately, he began to move development at the asset manager toward an Agile methodology—and the results were noticeable from the start.
“We started the Agile practice in 2015, and right away it helped change the mindset and the culture of the team to see that they can contribute,” he says. “And it was a self-reinforcing thing on both sides. When you start to see progress, to see the technology platform changing, it has this effect where people want to engage even more.”
It wasn’t all smooth sailing, however. Moving to Agile was more than just a cultural move—it had real impacts on operational processes, and the fundamental ways in which technology worked. Whereas before, developers were used to release cycles and centrally managed delivery, now they found themselves delivering software tweaks into production on a daily basis. “Changing the culture of a large organization is hard and takes time,” Urciuoli says. “It is a battle you must fight on many fronts. The obstacle is not new technology—it is the willingness to try a new approach. When you have the pressure to deliver for your business, moving out of a comfort zone is hard for people.”
This required a further rethink of how the plumbing worked within technology. It quickly became apparent that the asset manager had to change a number of its tried-and-tested processes, including a move to automated testing and unit test code coverage, rather than relying on feedback from groups of manual users. “I was getting a lot of resistance. People were saying they were delivering to their users and they didn’t have time to do this, that they needed three months of delay in their schedule in order to adopt some of the new practices,” he recalls. “It became apparent to me that people weren’t buying into why they had to do this.”
To find a solution, he decided to look outside of New York, and headed west, to the sun-soaked hills of California.
In the beginning of 2016, Urciuoli decided that a practical demonstration was going to be the only way he’d get people to see what he was doing, and to drop the resistance he was beginning to feel from the changes he put in place. And so he planned a trip out to the West Coast in March to see “a couple dozen companies in Silicon Valley and Seattle.” Only, he brought the entire management team.
It is important for us to continually challenge our processes and how they can be improved. And to do that, we need the group to have a continuous learning mindset.Michael Urciuoli.
The companies they visited included “tech companies that you can figure out,” fintech firms, and even those outside of the technology industry that nonetheless had heavy technology pedigrees, such as automotive firms.
It wasn’t long, he recalls, before his managers truly began to grasp just what he was trying to do at Asset and Wealth Management—and critically, just how removed Wall Street’s practices were from the wider industry. “There was huge commonality between all these company visits,” he continues. “First of all, Agile, automated testing, streamlined CI/CD (Continuous Integration and Delivery) pipeline, cloud, DevOps, all of those things were just taken for granted and they were a part of every company visit. So the light bulb went off that there is a gap between the technology practices in the finance industry and Silicon Valley. ”
The trip was so successful that Urciuoli organized another the following year, in September 2017. This, in combination with bringing in outside speakers, and running town hall events, along with frequent code-a-thons, has been a key driver in the transformation of the asset manager’s technology. “It is important for us to continually challenge our processes and how they can be improved,” he says. “And to do that, we need the group to have a continuous learning mindset.”
Other areas have been involved in this wide-scale transformation, of course. The bank is a believer in the power of cloud technology, although it is happy to stick with a private cloud model, for the moment. It is also able to leverage the work done in other branches of the organization—front-end technology, for instance, is largely spearheaded by the retail bank, while big programs regarding distributed-ledger technology are underway in the investment bank. All areas are also actively examining the potential of quantum computing, and have sent representatives to work with IBM’s Q Network on how it can be applied to the industry.
Urciuoli has also been busy cleaning out the technical debt that the organization has accumulated over the years—he estimates that out of about 1,050 systems in use at the firm, they’ve managed to retire around 400 so far. “We are well down the path,” he says. “And in the next two years it will be mostly completed, both from the perspective of rolling out and finishing Spectrum and Connect, but also from finishing our transformation to cloud-native and DevOps. That’s the kind of progress we’re making; it’s pretty incredible,” he says.
Name: Michael Urciuoli
Title: CIO, JPMorgan Asset and Wealth Management
Hobbies and Interests: Tennis, skiing, scuba diving, underwater photography, cycling, travel.
Top of the Bucket List: Scuba diving Cocos Island
The founder and CEO of Imperative Execution looks at how trade execution is changing and what that means for the buy side.Subscribe to Weekly Wrap emails