Deutsche Bank has tested its resilience in the light of the potential loss of a technology centre in Russia, following the country’s invasion of Ukraine.
The German bank, like most large multinationals, uses a global delivery network for IT, which reduces its exposure to risks in one particular region. “Russia is just one of multiple tech centres that we have around the world,” it said.
Deutsche Bank has about 1,500 employees in a technology centre in Russia, carrying out software maintenance for investment and corporate banking operations.
The bank said in a statement: “Clearly, the Ukraine invasion will have an impact on the bank, as it will on many companies. But we have rigorously tested our operational resiliency and are confident that the day-to-day running of our trading business will not be affected. We have no code and no data housed in the Russia tech centre.”
Eastern and Central Europe have become important components of global delivery networks. They offer large Western European-based companies services from closer to home than alternatives such as India. The region also has a highly skilled science and technology workforce – a legacy of the Soviet era.
But large businesses like Deutsche Bank can harness tech resources in other regions of the world when they have to scale back certain centres.
Peter Schumacher, CEO at management consultancy The Value Leadership Group, said Deutsche Bank will have other regions it can shift work to, but the challenge will be knowledge transfer.
“I would expect Deutsche Bank to transfer work to India,” he said. “It can’t move work to its German operation because it doesn’t have that amount of people available. If knowledge transfer is possible, within the sanctions, I would expect it to be possible to transfer work within a month.”
Deutsche Bank’s statement added: “We are monitoring the situation closely and may adapt our approach as appropriate. We have reduced our exposure to Russia significantly over recent years and the risks are well contained.”
Schumacher said the conflict could have a massive impact on IT suppliers that have large workforces in affected countries. For example, Epam Systems has more than 9,000 staff in Ukraine, about 9,500 in Belarus and 6,000 in Russia.
Read more about tech crisis in Ukraine
- IT professionals in Ukraine are working tirelessly and at great risk to keep the country connected to the internet during the Russian invasion.
- IT companies are reaching out to IT professionals in the Ukraine with offers of support for those looking to work in the UK.
- Hackers have been responding to Ukraine’s call to create an IT army, but there are many reasons why taking direct action in a kinetic conflict is a bad idea.