- Launch of the Digital Factory, Frankfurt am Main
- Opened a third Innovation Lab in Silicon Valley in 2016
- Up to €1 billion investment in digitalization by 2020
The dynamic landscape of technology, along with changes in customer behavior and preferences, is driving a trend of digitalization across the economy, with a marked impact on financial services. Digitalization opens up opportunities for product, service, and business model innovations, as well as an enhanced customer experience. It also facilitates more efficient internal processes in that more activities can be carried out electronically, with banking transactions faster and more streamlined.
With new emerging players such as FinTechs (financial technology firms) challenging established financial institutions and their business models, it is evident that successful digital transformation will be a key source of competitive advantage.
The Digitalization Initiative
We launched the bank’s Digitalization Initiative in 2015, as part of our Strategy 2020. We aim to invest up to €1 billion by 2020 in digital technology across all four businesses to:
- enhance the client offer by offering a seamless omni-channel experience and more customized products and services;
- harness the power of data in order to understand customers better and further strengthen risk management, financial and regulatory reporting, and reduce costs; and
- strengthen efficiency and controls, by increasing automation and reducing the risk of manual error.
We are also collaborating with external partners such as start-ups, FinTechs, innovative companies, developers and designers.
Governance and management
The digitalization initiatives are business aligned, with ownership lying within the individual business or infrastructure units. The initiatives are supported by the bank’s Chief Operating Office (COO), which provides delivery and technical infrastructure. In addition, innovation is supported by the Deutsche Bank Labs teams. All digital initiatives are reported to the COO Executive Committee, with Kim Hammonds, Member of the Management Board and Group Chief Operating Officer, overseeing the overall digital initiative.
Developments in 2016
Deutsche Bank has become one of the first financial institutions to establish a professional research and development department, featuring three innovation labs (Deutsche Bank Labs) along with our Digital Factory in Frankfurt am Main. We opened our third lab in Silicon Valley in 2016, adding to the two in London and Berlin respectively.
Speed and adaptability are key success factors in digital services. It is thus important to build teams from the business areas and technology and in 2016 we launched a Digital Factory in Frankfurt am Main, dedicated to developing digital banking products. Around 400 software developers, IT specialists, and financial experts from 14 countries work at the Digital Factory (expected to rise to 800 by 2018). The first successful project was the Deutsche Bank Mobile app launched in April 2016.
In Berlin, we established the most modern banking branch in Europe: Quartier Zukunft. This includes space for start-ups and a customer lab for testing apps and providing feedback—a blueprint for connecting digital and analog access points. In Dublin, we launched The Hive, a data lab employing 40 specialists in data science, visualization, analytics, and technology. The lab uses cutting-edge technology to scan vast quantities of information for patterns and insights and presents them in a user-friendly visual format.
In November 2016, the bank opened its data store to external software developers, giving them the opportunity to create digital solutions for clients that go far beyond traditional financial services. A new developer portal provides access to the bank’s proprietary development environment, allowing programmers to test their ideas for future services with simulated, but client-driven data. The dbAPI programming interface was successfully tested at the Deutsche Bank Hackathon in Berlin, a three-day competition, which saw 750 applicants and 70 participants from 22 countries.
We partnered with Massachusetts Institute of Technology’s Initiative on the Digital Economy, an international alliance of visionary pioneers in the digital economy, and we strengthened our collaboration with the European start-up sector by joining forces with the Axel Springer Plug and Play Accelerator, a platform to find up-and-coming tech players from sectors such as banking and insurance. We will help to select start-ups and will offer them support, workshops and financing. The start-ups selected to receive funding will also gain access to innovation labs and the Digital Factory in Frankfurt am Main, allowing us to support our own research and development activities in digitalization.