Deutsche Bank signs multi-year strategic deal with Google
Deutsche Bank has today agreed a 10-year strategic partnership with Google that will see the tech giant overhaul the bank’s outdated back-end technology.
Google beat out bids from Microsoft and Amazon among others for the deal, which will give Deutsche access to cloud services and drive fintech innovation between the two companies.
The deal is part of a €13bn technology investment plan Deutsche has mapped out until 2022, as it restructures to recover from five consecutive years of losses.
Google and Deutsche have now signed a letter of intent and plan to sign a multi-year contract within the next few months, the bank said.
“The partnership with Google Cloud will be an important driver of our strategic transformation,” said Deutsche Bank chief executive Christian Sewing.
“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.”
Deutsche Bank’s three-year restructuring plan has so far included the cuts of around 18,000 full-time jobs, the creation of a €288bn so-called bad bank, an exit from investment banking and €5.8bn in cost reductions.
Today’s move follows the resignation of its group chief information officer and chief technology officer last month, after less than a year in the role.
A source familiar with the matter told Reuters that Deutsche Bank expects the partnership to generate more than €1bn in accumulated earnings before income and tax over the next 10 years.
“For more than 150 years, Deutsche Bank has been an industry pioneer, with a strong record of innovation in the financial services sector,” said Sundar Pichai, chief executive of Google and Alphabet.
“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.”