Deutsche Bank partners with Google to transform banking
The changes yielded by the collaboration will be handled on two fronts: Google will empower Deutsche with its state-of-the-art cloud capabilities and the two will then pool their collective resources to explore new horizons.
This will accelerate the Bank’s digital transformation by overhauling its technical infrastructure in phased segments, thus adding client value. Deutsche also emphasised that its new direction would in no way compromise the secure integrity of its stored customer data.
One of the specified gains for Deutsche Bank is access to Google’s artificial intelligence (AI), machine learning (ML) and data science capabilities. Its overall focus will be to harness this technology in order to make digital and online financial services simpler, faster and easier.
Other use cases could include cash flow forecasting, augmented risk analytics and superior security for customer accounts.
“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 digitisation. It is as much a revenue story as it is about costs.”
Sundar Pichai, CEO of Google and Alphabet, added that the opportunity was recognised as prestigious by Google and he hoped that it would enable Deutsche to continue an industry tradition of championing innovation:
“For more than 150 years, Deutsche Bank has been an industry pioneer, with a strong record of innovation in the financial services sector.
"We’re excited about our strategic partnership and the opportunity for Google Cloud to be helpful to Deutsche Bank and its clients as they grow their business and shape the future of the financial services industry."
Developing a digital transformation strategy
Part of Deutsche’s overarching strategy for technological reinvigoration, the partnership came about after five months of talks; the Bank commenced discussions in February with several major providers as part of its multi-cloud plan.
“This cooperation with Google Cloud is a significant step forward for our technology strategy, and will transform the way we produce and deliver our client services,” said Bernd Leukert, Deutsche Bank’s Chief Technology, Data and Innovation Officer.
“By bringing together the best of both cultures, we look forward to creating new business models leveraging artificial intelligence, data analytics and more with an established technology and innovation leader.”
AI and the future of global trade
Artificial intelligence (AI) is becoming entrenched in our daily lives, but the technology is still surrounded by misconceptions and skepticism. Ask the public and they may jump to dystopian scenarios where robots have taken over the world.
While this makes for a good sci-fi blockbuster plot, the reality is different and more benign. Those products that Amazon suggested you buy? AI. That TV series you were recommended to watch on Netflix? AI. That self-driving Tesla car you crave to take for a spin? You guessed it: AI.
There is no single industry that is not being re-shaped by technology. Until recently, however, there was one noteworthy exception: global trade. Fortunately, that is slowly changing.
The mechanism that underpins global trade – trade finance – is an industry that remains largely paper-based and reliant on manual processes. This US$18tn a year industry is now being influenced by a new wave of technological innovation, including AI.
Exploring the potential of AI in Trade Finance
AI refers to the use of computer-aided systems to help people make decisions or make decisions for them. It relies on large volumes of data and models to make sense of information and draw intelligence.
In trade finance, AI is helpful in analysing quantitative data, and the repetitive nature of trade finance means that there is a lot of non-traditional data at our disposal.
This means that when trade finance providers need to assess the risks of funding a transaction, AI models can be a very efficient tool for data analysis and reveal intelligence and risks relating to small companies.
AI helps the industry move beyond traditional credit scoring processes, which are often outdated and remain reliant on historical accounting entries – a barrier that prevents small companies from accessing trade finance and has resulted in a $1.5tn global shortfall.
Overcoming the barriers
AI can tackle this shortfall by creating accurate credit scoring models. This can include a company’s payment history, measure the risks of funding a transaction, identify supply chain risks, and benchmark them against their peer group.
Trade finance providers can use this information to communicate effectively with their SME clients, ultimately helping establish better business relationships.
Towards a technological utopia?
The adoption of AI has the potential to do a lot of good in the industry, and the industry is in the early stages of radical transformation.
Advances are driven by fintechs as well as a willingness to change. The industry is working together to create new infrastructure for distributing trade finance assets to other investors in a transparent, standardised format.
The creation of infrastructure is possible due to improvements in technology and integrated across the trade ecosystem in cooperation with banks, insurers, and other industry participants.
It’s collaboration at its best: together, the industry is using technology to re-shape global trade as we know it.