Deutsche Bank DigitalBanking: Chapter two

Is the financial industry facing a digital revolution?


The digital revolution has captured the banking world completely. What does this mean for each of us? Will we soon be dealing with robo-advisors and algorithms?

Is this your future financial advisor?


  • Yes, why not?


    You are not the only one to think this! In the US alone, robo-advisors are expected to be managing assets with a value of USD 2 trillion by 2020. In December 2014, the 11 leading robo-advisors in the US represented just 0.1% of the country’s total assets under management. The predicted rate of growth is breathtaking.

    Source: A.T. Kearney / Deloitte 2015


    Even if it isn’t a robo-advisor: the established approach to banking is challenged. Who are the new players and what do they offer?

  • No, that’s unthinkable


    This might change: in December 2014, the 11 leading robo-advisors in the US represented just 0.1% of the country’s total assets under management. But the predicted rate of growth is breathtaking: in the US alone, robo-advisors are expected to be managing assets with a value of USD 2 trillion by 2020.

    Source: A.T. Kearney / Deloitte 2015


    Even if it isn’t a robo-advisor: the established approach to banking is challenged. Who are the new players and what do they offer?


Back to the question

Fintechs: the startups of the financial sector

“There is always another startup waiting in the wings that does things better, more efficiently, more elegantly and in a more integrated way.”


The appearance of the new players: digital protagonists are small, versatile and they optimise constantly. Could this be the end of traditional banks?

Fintech reloaded: “All competencies that are available on the financial market unified under one umbrella.”


6 theses on the digital (r)evolution in the financial sector by Thomas Dapp, Deutsche Bank Research

Thesis 1

Digital structural change is piling up the pressure on traditional banks.


Banks have recognised the importance of digital developments and are working intensively on potential solutions and strategies. Many innovations can primarily be experienced at the client front-end. There is, however, much more to this topic.

Thesis 2

Divisions often look for fragmented, isolated solutions.


Innovation processes are still being driven forward slowly using a painfully outdated silo approach. Furthermore, many banks' command of the global “language of the internet” is still deficient. The banks will not achieve resounding success using such methods. Digital change requires far-reaching structural reforms.

Thesis 3

The new players have an almost perfect understanding of the internet’s language.


First and foremost are the scarcely regulated digital ecosystems, but there are also many Fintechs that are using their platforms and ingenious “walled garden” strategies to dominate markets. Via the optimum interlinking and utilisation of technologies we are wooed with products and services conveniently, globally and all from a single source.

Thesis 4

Traditional banks could do this, too.


This now provides the opportunity to swiftly learn and adopt the strengths and particularly the monetisation strategies (walled gardens) of the successful digital ecosystems.

Thesis 5

The transformation into a digital banking ecosystem has many benefits for banks.


Apart from easy access to numerous personalised products and services, including those of external providers, as well as a more secure IT environment, the customer can make interactive contributions on the financial platform in a variety of useful networks. The banking ecosystem also offers a flexible corporate architecture.

Thesis 6

Above all, this requires open programming interfaces and the use of advanced key technologies.


Besides using compatible and interoperable technologies both, structured and unstructured data must be recognised (machine-readable), evaluated and processed. The combination of automation and self-learning algorithms instrumentalises the user’s own data consumption in order to generate new products, services and processes.

Source: Deutsche Bank Research, “Fintech reloaded – Traditional banks as digital ecosystems” (Link to the complete study)

#dbDigitalBanking

“It is about the future of banking in a fully digitalised world.”


Which digitalisation trends is Deutsche Bank investing in? What are the digital services beyond the classic banking business? How are the branches involved? What role do the Innovation Labs play and how does the new “Digital Factory” work? And last but not least: what role do Fintechs and internet giants play?

Markus Pertlwieser and Jörg Rheinboldt

“For us, this is a strategic step towards investing in new digital business models.”


Markus Pertlwieser, Chief Digital Officer of Deutsche Bank’s Private Clients division, and Jörg Rheinboldt, Managing Director of Axel Springer Plug and Play, agree: together, both companies are pushing for a faster way to find promising digital start-ups from sectors such as banking and insurance and support their business success.

JP Rangaswami

“You cannot innovate in isolation. Our labs are integrated in innovation communities.”


JP Rangaswami, Head of Strategy and Innovation in the Chief Operating Office, talks about change through collaboration and Deutsche Bank‘s innovation labs in London, in Berlin and in San Francisco.

Deutsche Bank Appathon

“I think people are eager to tackle the future.”


The enthusiasm to create tomorrow’s service features in an innovative environment releases creative potential. Lateral thinking is welcome!

Edward Budd: Blockchain explained

“In this entire process collaboration between market participants – competitors as they are today – is key.


The World Economic Forum named it one of its “tipping point technologies”, according to other sources Blockchain has the potential to disrupt business models across financial markets. About a forthcoming radical transformation.


transactions via banking apps have been carried out in the UK since you started reading this chapter.

Source: British Bankers’ Association 2015



What does the digital revolution mean for the start-up scene? In the next chapter you will meet some of the founders who are shaping this development – and driving it forward.

Chapter three

What are tomorrow’s innovation drivers?

Go to next chapter