CASE STUDY 1: Did Information Systems Cause

Deutsche Bank to Stumble?

Question 1: Identify the problem described in this case study. What

management, organization, and technology factors contributed to this
problem?
 The main problems described in this case study is that
o Deutsche Bank kept using its very outdated information systems.
Deutsche Bank disregared and neglected to improve its
information systems which caused the bank not to run
systematically. Antiquated technology was the reason why the
bank were not provided the right information to run business
properly and to respond to regulators.
o Besides, there was no “customer and supplier intimacy” because
of the information systems that were used.
o In addition, the problem relates to a higher cost of funding
because the central bank strengthen their rules and regulations
while the company has no reliable assets with a yield down the
road.
 The management, organization, and technology factors contributed to
this problem:
o Management/People: Traders or individual teams used different
incompatible platforms and they were reluctant to share data,
which is hard for the bank to reconcile the data. The problem is
also related with security. There were a lack of communication in
updating the management about the security problems they were
facing in which they could have protected themselves sooner
against the attacks if they were being kept up-to-date.
o Organization: The organization did not create effective strategies
which resulted in them facing lower revenue as well as many
critical situations. The CEOs and other board of directors put their
old technology on the side and they kept using their old and
problematic information systems to compete with new and
complex issues.
o Technology: Deutsche Bank was using outdated technology which
made it very difficult for them to secure important financial data
in their systems. A lot of these old and problematic systems were
difficult to use, this means many of the complex issues that should
have been done with technology was done manually, mistakes
also increased as a result.
Question 2: What was the role of information technology at Deutsche Bank?
How was IT related to the bank’s operational efficiency, decision-making
capability, and business strategy?
 The role of information technology at Deutsche Bank is very imporatnt
as this bank has one of the world’s largest portfolio of derivatives.
o The IT was to handle: swap data reporting, derivatives, and legal
entity identities.
o IT has contributed to cross examining fundamental aspects which
leads to improvement in the Deutsche Bank.
 The IT related to the bank’s operational efficiency, decision-making
capability, and business strategy:
o Operational efficiency: With the use of information technology
they choose appropriate processes which results in improving
their operational efficiency and their overall position in the
market. Using IT was able to make sure the files and reports were
up to date and not outdated. IT is also used to manage a lot of the
complex banking issues with ease opposed to handling them
manually.
o Decision-making capability: As the IT provides the up-to-date
reports and data at the right time, the bank would be able to
make decision very precisely and timely. IT also allows the strong
communication between the employees and the bank.
o Business strategy: IT provides the accurate and precise data
analysis for the bank at the right time, therefore managers can
based on these information to figure out the effective business
strategies for the bank in the future.

Question 3: Was Deutsche Bank using technology effectively to pursue its

business strategy? Explain your answer.
Deutsche Bank was not using technology effectively to pursue its business
strategy. We can see from the articile, there were many statements saying
about the poor performance in technology on behalf of Deutsche Bank.
o In 2008, they received a penalty of $7.2 billion to settle U.S. regulator
complaints.
o The bank got a complaint from CFTC for giving a late submission of swap
data.
o It was repeatedly stated that the technology was “inadequate”, antique,
as well as fragmented.
 o Deutsche Bank’s old technology made them not be able to give the right
information in order to run its business properly and respond to other
regulators.
o The bank had also had trouble with managing the underlying value of
the traded financial products they had which also cause not an efficient
operations because of non-compatible platforms.
o The bank also had little knowledge on how to use technology to handle
investments and how to allocate technological resources. For example,
the Deutsche Bank had more than 100 different booking systems and no
common set of codes for identifying clients, this is very unorganized and
can be very difficult to track a client and even harded to treat a client to
a reliable service.

Question 4: What solution for Deutsche Bank was proposed? How effective
do you think it will be? Explain your answer.
 The solution for Deutsche Bank was proposed by John Cryan – a new
CEO of the bank since 2015. Cryan wanted to ultimately reduce costs
and improve efficiency by laying off thousands of employees. He also
focused on changing the antiquated information systems of Deutsche
Bank. He wanted to improve the banks software and technology so he
appointed technology specialist Kim Hammonds to oversee
reenginerring and the banks information systems and operations.
Deutsche Bank also decided to withdraw from high-risk client
relationships, improve its control framework, and also its automating
manual reconcilations. Along with doing that, Deutsche Bank announced
a 10-yeat, multibillion dollar deal with HP in hopes of improving their IT
infrastructure and technology platform. They also worked with financial
technology startups to improve its technology.
 I think it will be very effective but the bank needs a lot of time to get
used to the new technology. These improvements should be in long
term to make sure that all the mistakes they had made in the past were
fixing and help the bank regain their profitability and stability. New
technology and IS will help the bank save a lot of money as well as
making the bank progress to a more secure and efficient system of
banking.