SYSTEM ERROR

Deutsche Ditches U.S. Digital Bank

Deutsche Bank Construction-ArneDedert-DPA
Deutsche Bank has an infrastructure problem.
  • Why it matters

    Why it matters

    Deutsche Bank had previously said its new planned digital bank would play a “key role” in its restructuring, but it must now find new ways to grow profits and expansion.

  • Facts

    Facts

    • Deutsche Bank announced plans last October for the creation of a new U.S. digital bank led by former board member Henry Ritchotte.
    • Chief Executive John Cryan shelved the project on Monday.
    • Over the weekend, Deutsche’s existing online banking system was plagued by errors, with double transactions showing up on customer accounts.
  • Audio

    Audio

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Deutsche Bank’s IT systems are notoriously outdated, a point driven home over the weekend.

On Friday, customers at Germany’s largest bank opened their online accounts to find erroneous double transactions. While the embarassing glitch was lifted the following day, it highlighted just how far Deutsche Bank still needs to go to upgrade its clunky infrastructure.

The timing of the glitch was especially awkward given the announcement that would follow on Monday: Deutsche’s Bank has abandoned its long-hyped plans to set up a new digital bank in the United States.

The bank had hoped to make the new digital operation a key part of its restructuring program. John Cryan, the bank’s chief executive, has made updating Deutsche’s IT systems a central part of his reform plans since taking over the top job in the summer of 2015.

But in announcing the reversal on Monday, Mr. Cryan signaled the bank needed to spend more time upgrading its own infrastructure before taking on a new project like the digital bank.

“Despite the high quality of the concept, the executive board has decided against pursuing the creation of digital banking services in the USA at this point in time,” Mr. Cryan told bank employees in a letter seen by Handelsblatt.

Mr. Cryan said the project would have used up resources needed for “the implementation of our core strategy – focusing and modernizing our customer offerings and reorganizing our infrastructure.”

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