Deutsche Bank is turning to robots and artificial intelligence as it fires thousands of workers in an overhaul focused on ending a string of billion-dollar losses.
The German bank is bringing in A.I. to automate back office operations, according to Financial News, after earlier this year the bank announced the cutting of 18,000 jobs, or about 20% of the workforce. Deutsche Bank expects the automation of many tasks to save $6.65 billion over the next three years.
Mark Matthews, the company’s operations head, told FN that the robot program, named Operations 4.0, is increasing productivity and has permitted the bank to “redistribute capacity.” He said the program has saved about 680,000 hours of manual work as it processed 5 million transactions in its corporate bank and performed 3.4 million checks in its investment bank.
Deutsche Bank is expected to lose more than $5 billion this year as it pays for the restructuring amid a several-years running slump in revenue. Employing algorithms to cut human labor costs would be welcomed by investors hungry for profits and a reversal of the share price that’s collapsed over the past decade.
The company’s third-largest shareholder, private equity firm Cerberus Capital Management, is pushing for removal of Chairman Paul Achleitner, the Financial Times reported last week, who has overseen $10 billion in losses and the company’s exit from several lines of business.
Deutsche Bank is also facing fines of as much as $1 billion in a U.S. Department of Justice investigation of the bank’s anti-money-laundering efforts, Bloomberg reported.
- Deutsche Bank’s investment bank employs 9,000 in operations, Matthews told FN.
- Banks are applying tech fixes to help with rising competition and costs.
- Overall, fintech investments are not flowing as freely as they once were. Global private investments in fintech industry dropped about a third this year from 2018, totalling $60.7 billion, according to PitchBook.