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Deutsche Bank has so far saved £9m and eliminated the need for 18 applications through a system designed to replace multiple legacy systems and applications used to report its daily trading positions.
Run in its corporate and investment bank division the dbPalace project broke from tradition by using agile techniques, providing shorter product release times and engaging in high levels of collaboration with IT partner GFT.
The project began in 2015 and looked to simplify and standardise the Risk and Profit and Loss (Risk and P&L) engine that works out the value of the bank’s trades on a daily basis. This aimed at reducing costs, increasing business agility and made meeting regulatory compliance simpler through automation.
After trades are completed, systems have to value the trades the bank has made each day as they change to establish its daily position. This is followed by a Risk and P&L system that creates a trading balance sheet from this information, which is used by traders.
Deutsche Bank previously had 48 different systems executing this. These systems were legacy systems that had either been acquired as the bank grew or were built to address specific business challenges.
Chris Bezuidenhout, CIO of market finance at Deutsche Bank, said there was complexity and high IT costs supporting multiple legacy systems across different parts of the business. “We decided to invest quite a few million pounds in a new global Risk and P&L solution because we were using many different systems globally with little in terms of standardisation and a high IT overhead.”
About three years ago, the bank embarked on the dbPalace system project to address this.
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Bezuidenhout said that so far there has been a positive return on investment, with a £9m reduction of the total cost of ownership as a result of decommissioning about 18 applications. “We believe there are another 15 applications to go over the next two years, with a total of 33 of the 48 to be decommissioned by the end as part of this initiative alone.”
The huge cost benefits might steal the headlines but there are massive advantages to the business. “By standardising, we can change our operating model without having to navigate complex system infrastructure, and the programme has helped us meet regulatory compliance without incurring extra costs through manual intervention,” said Bezuidenhout.
Reducing manual intervention is a theme likely to accelerate at Deutsche Bank. Last year, CEO John Cryan told an audience at a conference in Frankfurt that a “big number” of the bank’s staff will lose their jobs as a result of new technology taking over. The bank has around 100,000 employees.
“In our banks, we have people behaving like robots doing mechanical things,” he said. “Tomorrow, we’re going to have robots behaving like people.”