Deutsche Bank made the news, both in terms of an ECB warning and job cuts.
First, Deutsche Bank shares led rivals lower Wednesday after the European Central Bank warned that low interest rates could lead to excessive risk taking that could threaten the single currency area’s financial stability and noted deteriorating earnings prospects for regional lenders.
Deutsche Bank, like a number of Eurozone banks, has been crushed since peaking in 2007.
Of course, DB’s earning per share have been plunging like the German battleship Bismarck (along with the share price).
Cutting expenses is one way to increase EPS.
According to MishGEA, Deutsche Bank to Replace 18,000 Workers with Robots. Mark Matthews, head of operations for Deutsche’s corporate and investment bank, told Financial News that machine learning algorithms “massively increased productivity” and “redistribute capacity.”
The London-based news organization said that Deutsche is pushing to “automate large parts of its back-office” via a new strategy called “Operations 4.0,” as part of its $6.6 billion savings initiative over the next three years.
Matthews told FN that the machine learning tools helped to save “680,000 hours of manual work” and that it “so far used bots to process 5 million transactions in its corporate bank and perform 3.4 million checks within its investment bank.”
Of course, Meadows is referring to machine learning algorithms, not robots like in “Lost in Space.”
Now GMU finance students will understand why I force Python and Matlab on them in my classes!
To paraphrase the late Johnny Horton, “The Germans had the biggest bank that had the biggest guns.”