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Deutsche Bank prepares digital wealth-management launch

Deutsche Bank, having consolidated and outsourced core banking for wealth management, is about to launch its digital front end.

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Deutsche Bank intends to introduce the first iteration of its digital service for wealth-management clients in August, pending regulatory approvals in Hong Kong and Singapore, the two markets where the platform will make its debut globally.

Sandipan Ray, Singapore-based managing director and head of technology for private wealth, says the platform will let wealthy clients access account and product information online, via mobiles, tablets or desktops. (For a broader take on Deutsche’s digital transformation, listen to our podcast.)

Subsequent iterations will include research, and trading and execution. The bank is also working with third-party fintech companies on a variety of other services to be rolled out.

Ray acknowledges that other global private banks have been quicker to enable digital interfaces with clients. But he says Deutsche has laid groundwork over the past few years that will enable it to gain competitive advantages in the digital space. (Click here for stories on rivals UBS and Credit Suisse.)

“I speak with my ex-colleagues,” said Ray, who joined Deutsche seven years ago after working at Citi and UBS. “I see how their offerings have been taken up. Our first launch isn’t a differentiator. But given what we’ve done with our systems architecture and the way we can deliver features, we will soon be at par, or above par.”

He argues Deutsche’s technology drive for its wealth business is better integrated across all arms of the bank, including investment banking, research and product development, and not just with COOs in the private bank.

Outsourcing core banking
Ray’s team has spent several years reconfiguring its core banking systems, which when he joined was a mixture of legacy platforms. In 2015, the bank completed a major consolidation and outsourcing of this to Avaloq, the Swiss-based back-office tech provider for wealth managers. Part of that deal involved agreeing to serve as Avaloq’s first outsourcing client in Singapore, and moving its operations staff to the vendor.

That freed the bank’s tech team from having to deal with systems maintenance. It also provided a common platform for new developments. The bank made Switzerland and Singapore its I.T. hubs, and Ray had these two synced to eliminate regional differences in functionality. Some functions are carried out by one team globally – such as corporate actions or processing exotic options, which is done in Singapore.

But Ray says that any new feature designed for one market can be processed for most of the bank’s markets: by the end of this year, only the U.S. and Germany (where there is a substantial mass-retail business) will still operate independent processing systems.

This heavy lifting occupied Ray and the I.T. department through the first half of 2016, as they worked with bankers and regulators to ensure the outsourcing program worked.

By the second half of 2016, he turned his attention to digitalization. He put in place a DevOps culture including scrum teams, and built a UX stack (for user experience). “We have to automate every process, so that we can then digitalize it,” he said.

Another plank to realize this strategy is the establishment of a center in Pune, India, for coding and doing a lot of the delivery legwork on various projects. This is still a work in progress, but is meant to let Ray’s teams in Singapore and Switzerland focus on architecture, client advisory services and change management.

Working with fintechs
Because he and his team were part of the wealth-management business, working with clients, he says it was easy to understand business needs, and move quickly: “We’ve tried to build a standard UI [user interface] and architecture so that we can add new features every two-to-three weeks, rather than every three-to-four months. This is a big change for us.”

The first iterations of these projects are about delivering capabilities to bankers. Once Ray and the business heads are confident the services are working, they can be extended to the clients directly.

For example, one part of the digital process has been to develop Spotlight, an internal messaging app. For now this is a tool for bankers to use messaging rather than email to securely look at documents and PDFs on their smartphones. At some point, the bank wants to extend this communication tool to clients, too.

The final effort is working with third-party fintechs for specific services. For example, the bank has worked with a German company to develop a digital signature for wealth clients.

It is also now working with a Swiss fintech to build a secure vault, so the bank (or its partner) can store wealthy people’s confidential documents: these are now digital too, and the bank needs a way to safekeep these.

Other projects include adding voice recognition for helping customers access the bank’s digital channels, and work with a U.K.-based specialist in artificial intelligence to mine client behavior to push more targeted content.

Ray declined to name the fintech partners because these projects are still in development.

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Deutsche Bank prepares digital wealth-management launch