Deutsche Bank cuts jobs but increases tech spend
Deutsche Bank is cutting 18,000 employees over the next two and a half years to reduce costs by €6bn a year, with technology investment to increase to counter the staff reduction.
As part of its plans, the bank said it will spend €13bn on technology through to 2022 to digitise all business operations.
To do so, it will create a separate technology function, which “will have responsibility to further optimise Deutsche Bank’s IT infrastructure and will drive the digitalisation of all [the bank’s] businesses”, according to a statement from the bank.
The bank will also restructure its infrastructure functions, which include back-office systems and processes that support all business divisions. “These functions will become leaner, more innovative and more digital,” said the bank.
Deutsche Bank also expects to reduce adjusted costs by approximately €6bn euros to €17bn euros in 2022.
Technologies such as automation and artificial intelligence (AI) software are seen as a way to reduce the number of workers without reducing performance. For example, in 2018 Deutsche Bank created a platform to automate cheque processing to eliminate a largely paper-based process, which required human intervention.
Furthermore, it has made no secret of its desire to harness these technologies. In September 2017, the then CEO at the bank, John Cryan, said a “big number of staff will eventually be replaced by robots”.
“In our banks, we have people behaving like robots doing mechanical things. Tomorrow, we’re going to have robots behaving like people,” he added.
One IT professional in the banking sector doubted the bank would be able to afford to spend as much on IT as it would like. “But on the plus side, it does show banks are finally realising they are IT businesses,” he added.
But he said the bank might struggle to attract the right IT staff to complete its ambitious plans. “As a banking IT person, it is not a place I would chose to work and I imagine other IT people may also not have it at the top of their list of potential employers,” he added.