The Deutsche Bank headquarters are seen in Frankfurt, Germany October 29, 2015.Reuters/Kai Pfaffenbach
Deutsche Bank is embarking on a major computer systems upgrade that will help it to make greater use of so-called “big data” to provide a detailed picture of how, when and where customers interact with it, the bank’s chief data officer said in an interview.
JP Rangaswami, who joined Deutsche Bank in January as its first-ever chief data officer, said better and cheaper metadata was allowing the bank to analyze previously inaccessible information.
“We are able to see patterns that we could not see beforehand, allowing us to gain insights we couldn’t gain before,” Rangaswami told Reuters in an interview.
Upgrading the technical infrastructure Deutsche Bank needs to get the most out of this data is a priority for Chief Executive John Cryan. He is trying to improve the performance of Germany’s biggest bank, which is struggling to adapt to the tougher climate for banks since the financial crisis.
Cryan, who unveiled a big overhaul at Deutsche on Oct. 29, said at the time that imposing standards on Deutsche’s IT infrastructure was key to improving controls and reducing overheads.
The CEO said in the October presentation that IT design had occurred in silos with the application of little or no common standards. “Our systems are disjointed, cumbersome and far too often just plain incompatible.”
Deutsche Bank is not alone with its IT troubles.
An annual global survey of more than 200 senior bankers published last week by banking software firm Temenos found that “IT Modernization” was now top priority, displacing earlier investment objectives such as regulation and customer friendly mobile apps. IT modernization ranked only fourth among major priorities in the survey last year.
Royal Bank of Scotland, for example, had a computer systems failure this year and HSBC had a major payments glitch.
The shift toward technology as a priority shows the extent of the challenge facing banks to modernize infrastructure to analyze internal customer data and try to fend off competition from new financial technology companies.
Rangaswami, who was chief scientist at Silicon Valley marketing software giant Salesforce from 2010 until 2014, said the data would allow Deutsche to tailor services to customers’ needs and to identify bottlenecks and regional implications faster and solve problems more quickly.
“Customers provide many signals directly through their actions: when and how they log in, what products and services are used, the time of day, the location and so on,” he said.
“Our goal is to get to know customers directly rather than going elsewhere,” he said.
Banks’ focus on “big data” to target customers with products has caught the attention of regulators in the European Union.
This is partly because of privacy concerns raised by civil liberties campaigners who also say data could be misused to discriminate against certain sections of the population.
Rangaswami said Deutsche Bank was also using “unstructured” data gleaned from (customer) conversations, emails, complaints or queries, to refine its services further.
He said a problem that a customer perceives and puts in the subject line on a contact form, such as slowness of service, for example, is often not the root cause.
“If you realize that problems always occur at 2:20 pm, the material learning is saying: something at this time of the day is affecting our services – let’s look into it.
“Traditional approaches wouldn’t necessarily capture that, because they are trying to solve the problem as soon as possible rather than seeing the bigger picture,“ he said.