Deutsche Bank eyes AI solution

Deutsche Bank, a leading German lender, is investigating the potential of generative artificial intelligence (AI) to automate labor-intensive operations within the banking industry. Fabrizio Campelli, the head of the corporate and investment bank at Deutsche, revealed that AI has vast applications in the sector and the bank is actively exploring its implementation across various business lines.

Campelli emphasised that generative AI could revolutionise existing processes that are heavily reliant on human intervention. By successfully automating these technical and data-driven tasks, the bank believes it could significantly enhance efficiency. However, Deutsche Bank is cautious and carefully assessing the compatibility of AI tools within the regulated banking environment to ensure compliance with industry requirements.

One area of focus for the bank is reducing the workload of junior bankers during the early stages of their careers. Generative AI could alleviate some of the time-consuming tasks carried out by these professionals, such as handling comparables and company reports. This move comes in response to the push for improved working practices within the banking sector, prompted by concerns over analysts’ and associates’ mental and physical health.

Additionally, Deutsche Bank is actively expanding its dealmaking capabilities, contrary to its Wall Street rivals’ trend of implementing layoffs. The bank has hired 50 new bankers this year, with Campelli spearheading the recruitment efforts. Notably, Deutsche Bank has attracted talent from Credit Suisse following its acquisition by UBS, with several dealmakers joining the team. However, Campelli expressed caution about over-hiring, considering market conditions and the bank’s goal of achieving increased efficiency.

While Deutsche Bank seeks to enhance its M&A capabilities and deepen its presence in equity capital markets, it aims to reduce its reliance on leveraged finance fees. The bank aspires to become the pre-eminent European investment bank, focusing on large corporations rather than private equity funds. However, Campelli clarified that the bank does not aspire to become a leading global bank due to the significant reinvestment it would require.

As part of its European expansion strategy, Deutsche Bank has also made notable moves in the UK market. Its recent acquisition of City broker Numis for £410 million has bolstered its presence. Campelli highlighted the importance of a strong corporate broking business in the UK, as it significantly impacts the allocation of ECM deals and M&A transactions. While integrating Numis presents challenges, Campelli believes the bank can draw from past successes in the industry to ensure a smooth transition.

Deutsche Bank’s exploration of generative AI and its commitment to growth reflect the bank’s ambition to enhance efficiency, optimise processes, and establish a prominent position in the European market while maintaining a cautious approach to market conditions and cost-saving measures.