Deutsche Bank's cloud transformation is a costly ordeal amid overhiring concerns
Deutsche Bank is looking to cut costs by any means possible. CEO Christian Sewing told staff in a memo last month that "nothing is off-limits," although that may not be strictly true; the bank is still committed to its tech transformation and the bulky fixed costs that come with it.
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The bank is five years into a ten-year partnership deal with Google Cloud. Insiders allege that the deal is costing Deutsche Bank €1.3bn ($1.36bn) or €130m per year. This isn't a staggering amount but, at ~4% of the bank's annual budget, it's far from a drop in the ocean; The bank reduced total costs by €200m in 2023.
It's not clear whether the €1.3bn figure accounts for staff costs, which the FT said this week have become "bloated" in recent years. Deutsche Bank doesn't disclose how many staff members it has working on its transformation, but the bank's "infrastructure functions" totalled 58,000 employees at the end of 2024, almost two thirds of total headcount.
The bank isn't hiring swathes of cloud engineers at the moment, but it is growing new teams in lower-cost locations; a Pune-based listing for a QA engineer in the home loan savings team of Deutsche's private bank, for example, says the bank is "building a team in India to work closely with [an] existing team in Germany" that is acting as a "pilot for the migration to Google Cloud." Just 11 of the bank's 619 open roles in technology are explicitly cloud roles.
Halfway through the deal, Deutsche Bank's cloud deal is starting to bear fruit. It expects to save €500m from infrastructure optimization and process automation this year, though it's not clear how much of that is a result of its cloud efforts. In a blog post last week, chief technology, data and innovation officer Bernd Leukert said the bank has moved 260 applications to the cloud and has been able to more easily implement generative AI applications through access to Google's AI platform, Vertex, via Google Cloud. Leukert says the bank is using generative AI to write code and analyze documents, while employees have access to a digital assistant.
Deutsche Bank declined to comment.
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