Dive Brief:
- Deutsche Bank is inviting bids from Amazon, Google and Microsoft to modernize the bank’s technology networks, sources told Reuters.
- The tech firms sent teams to Frankfurt, Germany, last week to develop proposals, launching a three-month pitching and bidding process, the wire service reported.
- The move is part of a $14.2 billion tech investment the bank has planned through 2022.
Dive Insight:
Tech modernization is just one part of a massive restructuring, announced in July, in which the German stalwart was set to shed 18,000 jobs, or 20% of its workforce. The bank said it planned to significantly downsize its investment banking arm and spin off $83 billion in assets it no longer wants.
"To help us evaluate our options, we have started a tender process with several cloud providers ... we expect to be able to complete the process in the coming months," Deutsche Bank said in a statement, according to Reuters.
The bank’s supervisory board signed off on a broad plan to overhaul the bank's technology systems, and four executives, including CEO Christian Sewing, highlighted the development in an October memo to employees.
"To succeed, we need to fundamentally shift how we build technology and move to a new way of working," they wrote, according to Reuters.
The bank hired a new chief technology officer, Bernd Leukert, to build a unit meant to oversee tech security, data and innovation. The bidding process stems from his talks this year with tech execs in the U.S. and Davos, Switzerland.
The initiative aims to streamline and update much of the bank’s outdated technology. For example, some retail customers still get their balances entered into savings books by printers for which spare parts are no longer manufactured. Additionally, Deutsche's management has complained about "lousy" and complex IT systems, Finextra reported.
Deutsche is also considering creating a corporate credit marketplace that the bank and its tech partner would own, one source told Reuters. The business would be open to companies and other banks as a brokerage for loans.
At least two of Deutsche's potential tech partners has been looking for added inroads to the banking space over the past year. Amazon holds cloud contracts with Capital One, BBVA and Goldman Sachs. Banking Dive reported last week that it was in talks with the latter to roll out small-business loans. The tech giant reportedly abandoned a plan last year to launch checking accounts with JPMorgan Chase. Google in November announced an initiative to "partner deeply" with Citi on its own checking accounts.
The lender is looking for a partnership that would be bigger in scope than the tech companies’ previous projects with banks, one person with knowledge of the matter said, adding that Deutsche is not interested in a joint venture because it would result in overheads, boards and bureaucracy.
Microsoft and Google declined to comment to Reuters. Amazon did not respond to a request for comment.
