In an effort to reduce costs and make it’s systems more competitive, German financial giant Deutsche Bank (DB) has decided to make a major technology shift. The strategy shift at the bank will see it dedicating billions of dollars to developing innovative technological infrastructures.
The problem at Deutsche Bank
The problem with most banks is that they are a highly complex system that is slowed down by extensive regulatory and compliance requirements. However, Deutsche has never been an organization that would focus on gaining maximum speed and efficiency in its process. Kim Hammonds, the former operations chief of the company even described it is as the “most dysfunctional” place she has ever seen. John Cryan, the former chief executive of the bank had similar issues. He complained about the slow processes and “lousy systems” at the organizations at length in 2015.
It appears that technological innovation has not been the German lender’s forte. Now, thankfully, things are about to change. The company announced the creation of a central technology division today that will be looking at data and innovation as well as tech security at the bank. The division will be headed by Bernd Leukert.
The company sent a note to its employees announcing the same and wrote,
“At its heart, our technology strategy empowers our businesses to control ‘what’ is produced, while technology has control of the ‘how’. In the past, the ‘how’ offered too much optionality and did not consistently follow group-wide architecture and tooling.”
A strategic shift towards technology
Apart from the tech division, Deutsche has also established a new Technology, Data, and Innovation Committee. This new committee, formed at the board-level came into existence in May this year and has already pledged to invest more than 13 billion euros in the company’s technological rehash by the year 2022.
Global banking giants have entered an arms race involving the most fruitful and cost-effective use of technology. One of the frontrunners, in this case, is JP Morgan, a Wall Street heavyweight that has a huge $11.4 billion budget for technological spending this year. The company is looking at blockchain technology to help innovate its cumbersome processes. It has created an in-house blockchain as well as a cryptocurrency that is being employed internally.
Deutsche was not planning any drastic moves and said that it would take some time in moving its process to the cloud. In the meantime, it would continue to mend its legacy technological infrastructure and make tweaks to ensure smoother and more efficient functioning.