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This report was commissioned to analyse the current business model and strategy of Deutsche Bank AG in regards to digital innovation, examine and evaluate its use of technological tools and to provide recommendations for future improvements.
Outdated technology and messy information systems have caused problems for Deutsche Bank in the past (Arnold, 2015). The bank has been dealing with losses and stock declines for the past few years, and its way of handling technology issues had something to do with it. If Deutsche Bank wants to recover its reputation as an icon and driver of German business, it needs to pay close attention not only to their balance sheets and income statements, but also to the digital advancements that are much needed.
Analysis of Deutsche Bank’s technology reveals that, internally, there is inconsistency throughout different teams and departments, lacking cohesion and causing mismanagement issues. Further analysis shows that, externally, Deutsche Bank suffers from a poor use of IT tools to enhance the customer experience. These issues raise two main problems: a decrease in efficiency and effectiveness, and poor customer relationship management (EY, 2018).
It is recommended that they increase productivity and efficiency through implementation of a company-wide IT policy, introduce a software system that can be used across all teams and departments, improve customer experience through creation of a better application using big data, analytics and artificial intelligence (AI), and lastly to invest in their Innovation Labs across the world, providing them with more resources and possibly expanding to other markets.
Deutsche Bank AG is a German investment bank and financial services company, doing business in 58 nations worldwide. Its primary products include private and commercial banking, investment banking, and asset management. As one of the most important financial institutions in the world, Deutsche Bank continues to be one of the most respected and trusted banks, despite financial struggles due to regulations and sanctions in recent years (Deutsche Bank AG, 2018). To keep a foothold on the banking and financial services market, Deutsche Bank has invested in developing technology and digital tools to improve their products and services.
In recent years, Deutsche Bank has struggled financially – finding it hard to balance revenue against very significant losses. This is partially due to economic sanctions and regulations that have been imposed on the company, but also due to mismanagement in IT departments and failure to adapt to new digital trends. Deutsche Bank’s dive emphasizes the company’s failure to adapt digitally, even as other banks and financial institutions improve their technological processes and services. While new technologies and digital tools are becoming more common in the banking world, being used to increase efficiency and build a better customer relationship, Deutsche Bank’s few attempts to improve in this matter have proved to be unsuccessful.
The bank suffered from decentralised systems and procedures, problems with legacy software, and poor use of data and IT reports. It was because of this that Deutsche Bank decided back in 2015 they should overhaul their IT systems and approach, entering a “new era” in the bank. They announced a restructuring of their IT along with a multi-billion deal with HP to migrate to a cloud infrastructure, hoping to solve some of the bank’s problems (Hall, 2015). Although they took steps in the right direction, this has proved not to be enough as the bank has continued to struggle with internal problems relating to technology.
Furthermore, while the bank has focused on their internal IT problems, they failed to look at how the use this technological and digital tools to engage with their customers. Apart from investment banking and asset management, Deutsche Bank also owns a great part of its reputation and fame to their commercial banking activities. It is important for a bank of this kind to successfully engage with their customers and keep them satisfied. So, evaluating what technological advancements and useful tools they can bring to their clients should have been another priority for Deutsche Bank, but it was not.
The mobile application for Deutsche Bank customers is currently ranked at 1.9/5 on the App Store, which is unacceptable for a company this relevant. Despite numerous complaints by the users, Deutsche Bank has not rolled out significant updates and has failed to fix major bugs. Some of them complain that the app shuts down on its own, that it only works sometimes, and that the interface is confusing. Going further, a lot of the reviews compare Deutsche Bank’s app to those of other banks, saying that this one is especially bad in comparison and they are considering switching accounts because of this reason. Deutsche Bank needs to urgently improve their application, as it is one of the most important points of contact with their customer, and it is inexplicable that a bank with this much importance and resources is just letting this issue slide.
Lastly, a very important issue is that Deutsche Bank is not taking full advantage of the potential that their Innovation Labs have. Over the past three years, the bank has opened five innovation labs in various cities around the world: London, Berlin, Silicon Valley, New York and Singapore (The Straits Times, 2018). The labs’ main aims are to create meaningful digital innovation and to collaborate with technology start-ups to produce the best outcomes for Deutsche Bank’s clients. These labs provide access to outstanding innovators and successful fintech businesses, and Deutsche Bank should try to actually implement the strategies and ideas they develop in the labs. With such a pool of resources, it is puzzling they have not used them to solve the problems with their app, for example. An issue with the labs is that they don’t commit to the strategies and ideas being created there, with only a few of the developments actually being implemented in Deutsche Bank’s “real-world businesses”. Apart from that, they have only opened the labs in big and famous cities widely regarded as cultural hubs, without taking into account which of their markets are most in need of technological transformation.
Overall, we can identify three main problems that Deutsche Bank has right now: failure to fully standardise IT systems and procedures, poor management of technology to improve customer experience, and underestimating the potential of their innovation labs.
In the analysis above, we can see that Deutsche Bank has taken steps in the right direction regarding their IT structure and that they enjoy an incredible pool of innovation resources, but is obvious that they have failed in various other aspects. Following are the recommendations that Deutsche Bank can implement in order to achieve a successful digital transformation, whilst improving their customer relationships and streamlining their processes.
Increase efficiency through the standardisation of IT systems and procedures
Further develop the process started back in 2015, which saw some success but did not achieve its full potential. It is suggested that Deutsche Bank could increase efficiency and productivity through the implementation of a standard IT system and procedure across its teams, getting rid of legacy software and developing one adapted to the company and its needs. Part of this process was started back in 2015, but there are still software inconsistencies across different departments inside Deutsche Bank. The process should be implemented on the whole company, implementing a software especially designed for Deutsche Bank which offers compatibility across all departments.
It is worth noting that the innovation labs could prove to be really useful here, helping to develop the system and procedure needed for the company. Deutsche Bank should take advantage of its own technological resources and staff to carry out this task, as they know the company from the inside and could provide insightful tips on how to develop an IT system that is the right fight for Deutsche Bank.
Improve customer experience through digital applications
This is possibly the most important point, and the one recommendation that Deutsche Bank should act on as soon as possible. It is essential that Deutsche Bank provides its customers with useful digital tools, so that they are able to enhance customer satisfaction. The one way to do this right now is to fix all the problems with the current mobile application for customers, and to develop a new one that better utilises tools such as big data, analytics and artificial intelligence.
The new mobile application should focus on providing customers with useful insights into their spending habits, using an AI-based tool that helps them change their financial habits for the better trough tips and recommendations. It could be compatible with other digital assistants such as Siri or financial applications like Mint, taking advantage of the bonuses of each. The application and AI assistant should accumulate feedback from clients and use it for self-training, thus becoming better over time as more customers start to use it. The use of big data and analytics could provide customers with a look into their financial future, helping them to manage their money and make the best decisions they can. Other banking applications like this are already functioning, and they have proved to be very successful with customers overall (Marous, 2017).
Expand and take full advantage of Innovation Labs
One of the best assets that Deutsche Bank has right now is their innovation labs around the world, providing enormous opportunities for digital growth and transformation. It is recommended that Deutsche Bank seeks to implement more of the strategies developed at these labs, not just leaving them as mere projects but actually integrating the ideas into their everyday business. Furthermore, they should invest more in the labs so that they are able to work better and faster, providing them with more resources than they already have.
Another recommendation related to the labs is that they expand them, opening up innovation labs in new cities around the world. The digital advantage that these labs provide is what will drive the Deutsche Bank of the future, and being a global company, they should try to make the labs as global as possible. For the creation of new labs, Deutsche Bank should look at the markets where they are suffering most from lack of innovation and technological advancement, and seek to open up spaces in those countries.
If Deutsche Bank follows these recommendations, they will obtain significant digital advantage over their competitors and provide a better experience for their customers. Not only that, but they will also improve their internal processes and become a more efficient company overall. Deutsche Bank is aware that digital innovation is what will make or break businesses in the next few years, and they have the resources necessary for it – now they just need to act on it.
- Arnold, M. (2015, October 26). Deutsche Bank to rip out IT systems blamed for problems. Financial Times. Retrieved from https://www.ft.com
- EY. (2018). How banks can transform from digital learners to digital leaders. Retrieved from https://www.ey.com/en_gl/digital/banking–innovation
- Deutsche Bank AG. (2018). Annual Report. Retrieved from
- Hall, K. (2015, October 27). Deutsche Bank’s creaking IT systems nervously eyeing bins. The Register. Retrieved from https://www.theregister.co.uk
- Deutsche Bank opens its first Asia-Pacific innovation lab in Singapore. (2018, November 14). The Straits Time. Retrieved from https://www.straitstimes.com
- Marous, J. (2017, October 30). Top 10 Retail Banking Innovations in the World. The Financial Brand. Retrieved from https://thefinancialbrand.com
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