Deutsche Bank is creating a 'digital factory', bringing together some 400 software developers, IT specialists and banking experts to develop new products and services as it struggles to reposition the bank for a digital future in the face of challenging market conditions.
The creation of the digital unit was previewed by John Cryan, co-CEO of the giant German bank as he reported a first quarter revenue decline of 22% year-on-year in the face of a "challenging" environment and the impact of strategic decisions to downsize and exit certain businesses.
Cryan initiated a massive shake-up of the bank's IT operations following a strategic review of the business last year.
In its corporate and investment banking unit Deutsche's 45 operational systems will be reduced to just four by 2020, while the bank's use of cloud technology will be quadrupled to include 80% of systems and virtualisation will increase from 46% to 95% of applications. The bank calculates that implementing these changes will save EUR800 million in running costs.
On the retail front, the bank plans to shutter 200 branches and invest an additional EUR1 billion over the next three-to-five years to focus on mobile and online sales and services.
"We are making Deutsche Bank simpler and more focused," says Cryan. "We closed 43 branches in Spain and Poland and proceeded to downsize or exit certain countries. We have been strengthening our control environment, upgrading technology and improving the processes by which we adopt clients. We are working hard to modernise the bank and bring it back to a leadership position in technology."
First fruits of this initiative comes with the launch of a new mobile app for iOS, featuring fingerprint log-in, gesture recognition and an improved intuitive interface for one-click access to transactional data and funds transfers.
The bank says the app will lay the foundations for the roll-out of mobile payments later this year when the Android version comes onstream. The app also opens the door to multi-bank aggregation, which lets clients monitor accounts at other financial institutions through Deutsche Bank’s online and mobile banking services for a complete overview of all account balances, including accounts at other banks.
The app is the first of a new generation of products to be developed at Deutsche's 'digital factory', which is set to fully launch in Frankfurt later this year.
"Here, around 400 digital specialists and banking experts will work together and cooperate closely with our Innovation Labs in Berlin, London and Silicon Valley to push forward our digital agenda," says Cryan. "With this initiative, we are building for the future."