Google and Amazon can be seen as both role models and threats, Deutsche Bank President Christian Sewing said while speaking at the latest iteration of the Euro Finance Conference held on Monday in Frankfurt, Germany. The 47-year-old reflected on the two U.S. tech giants as “bigger platforms” from which Deutsche Bank can learn, presumably referring to the scalability and digital-focused aspects of their operations. Mr. Sewing also admitted that both companies pose potential threats to Deutsche Bank, a more traditional financial institution which embraced the World Wide Web but wasn’t created on the back of an internet revolution. In the long term, losing customers to the likes of Google and Amazon is “the worst” scenario that Deutsche Bank could face, according to its senior executive.
Despite the potential challenges from the Silicon Valley that the Frankfurt-based bank could face further down the road, Mr. Sewing believes the two firms utilize client retention models that his company could learn from and apply them to its own operations. Doing so would potentially reduce the risk of losing customers to tech companies going forward, as suggested by the executive’s comments. Deutsche Bank Chief Executive Officer John Cryan was recently cited as saying that various technologies could help the company cut costs by reducing its workforce in the long term. Neither those comments from early November nor the ones provided by Mr. Sewing this week gave any specifics on the matter but both signaled that Deutsche Bank may significantly overhaul its operations in the long term by gradually implementing new technologies into its business.
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In the immediate future, Deutsche Bank is looking to control costs by creating a new company with its subsidiary Deutsche Postbank; in late October, the two announced their intentions to merge into a single entity by the end of the second quarter of 2018, with job reductions seemingly being positioned at the core of the move. The threat from Google and Amazon that Mr. Sewing mentioned could materialize in the form of small business lending operations that the two Silicon Valley giants could launch in the near future, according to recent predictions made by former Obama administration official Karen Mills.