Deutsche Bank: Pursuing Blockchain Opportunities (A)
2
Deutsche Bank: Pursuing Blockchain Opportunities (A)
Introduction and Background
Deutsche Bank is a prominent financial services corporation with operations in 70 countries, over 100,000 people, and assets worth $1.7 trillion. When the blockchain, the underlying technology behind bitcoin, was invented, the bank considered using it to revolutionize the banking and investing sector. It was determined that the application was viable and reachable after extensive study and development, testing, and evaluation of the applicability of blockchain payment systems on corporate bonds. Nevertheless, action alone was insufficient to deploy the program. To fully commercialize, it was necessary to overcome market, political, structural, and legal obstacles. The team's complete dedication was also required to ensure the project's success.
Blockchain technology was investigated within the business to serve its customers better and improve customer experience in late spring 2014 under the charismatic leader of Rhomaios Ram, Universal Head of Product Management of Deutsche Bank's Universal Transaction Banking division, and Paul Maley, Head of Debt Market Framework, Global Markets. The financial industry has to look for new ways to generate income due to the consequences of the global economic crisis, as well as develop efficiency and transparency through digitalization and infrastructure improvements. DB was pursuing a mixed information technology and digital strategy at the time, which included outsourcing generic banking infrastructure, regaining control
over essential software by bringing it in-house, and courting entrepreneurs and supporting ideas in an accessible innovation approach. In early 2015, the corporation revealed its "Strategy 2020" roadmap, which vowed to become a more digital bank with a €1 billion budget by 2020. Ram and Maley recognized blockchain as a digital technology that had the potential to facilitate safe transactions without the need for intermediaries.
Initial Concerns
Blockchain technology appeared to be on track to completely transform essential facets of
the financial system as it participated in the unrelenting march of digitization. The potential of this technology was undeniable, even though it was still uncertain precisely when the decentralized register idea would finally succeed. They set out to explore technology with this in mind. However, they immediately encountered significant obstacles. First, prior experience. Despite the apparent benefits of adopting the technology, no internal group members had the necessary technical know-how or background to incorporate the platform into any processes, including trading, securities resolution and clearing, or retail banking.
Second is cultural resistance. The idea, which appeared to be creative, had to get past the company's first opposition because it seemed to replace peoples' employment. Not only did it need to be comprehensive of all organization stakeholders, but it also needed to win their support
to advance possible projects. Last but not least, because of the future planning for using this technology, staff members had to abandon the short-term perspective common in the banking business. Third, organizational backing. Due to the idea's rapid conception and suggestion, the project needed resources and cash that the company had not set aside in its fiscal year. The COO had to decide before he could give the money required to start the process.
Notably, in the Blockchain Project, Ram and Miley took several crucial steps to raise internal awareness within the organization to generate interest in the project. These include blog posts in series on the corporate social media channel. Additionally, host a distributed ledger
