Deutsche Bank (DB - Free Report) in partnership with Alphabet’s (GOOGL - Free Report) Google Cloud is aiming to innovate and introduce the next generation of technology-based financial products. For the moment, the companies have signed a Letter of Intent, with plans to sign a multi-year contract in a few months.
With the partnership, Deutsche Bank aims to transform its IT architecture and will be able to benefit from the engineering capabilities of both companies.
Per the terms discussed by the companies, the multi-year transformation and optimization of the German bank’s current systems will be undertaken in a phased approach. Also, both parties are bound to comply with privacy and data protection regulations to maintain the confidentiality, integrity and availability of customer data and Deutsche Bank’s information assets.
Also, Deutsche Bank will be able to access world-class data science, artificial intelligence and machine learning, which would help it serve its clients better amid the growing demand for digital transactions.
The bank seeks to find a better solution for helping treasury clients, with day-to-day tasks such as cash flow forecasting, improved risk analytics and advanced security solutions to protect clients’ accounts. For the private banking business, digital and intuitive solutions will be the focus to simplify the interactions between customers and employees.
“The partnership with Google Cloud will be an important driver of our strategic transformation,” said Christian Sewing, CEO, Deutsche Bank. “It demonstrates our determination to invest in our technology as our future is strongly linked to successful digitization. It is as much a revenue story as it is about costs.”
The bank remains committed to undertake restructuring moves, including cost-saving measures, to improve its performance. Per a Bloomberg article, Deutsche Bank is mulling to divest either part or all of its investment funds platform, IKS. It caters to about 2 million clients, with more than €100 billion under management.
Deutsche Bank's efforts to improve financials by offloading unprofitable businesses and continued investments in order to expand its fee income sources are commendable. However, the company continues to be plagued with several headwinds and remains under the scrutiny of investors.
Deutsche Bank currently carries a Zacks Rank #2 (Buy). Shares of the company have gained 14% over the past six months against the 30.2% decline recorded by the industry.
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