Google Cloud-Deutsche Bank Deal ‘Right In The Bullseye’ For Thomas Kurian: Deloitte

Financial services partners Digital Reasoning, Imperva, EPAM Systems and Maven Wave also weigh in on the pact, which Deutsche Bank’s CEO hailed as ‘an important driver of our strategic transformation.’


Google Cloud’s partnership with Germany’s Deutsche Bank hits squarely on the mark when it comes to the cloud provider’s vertical industry strategy under CEO Thomas Kurian, according to a top Deloitte Consulting partner.

“This announcement is right in the bullseye for Thomas Kurian, who put the financial services sector as a key priority for our joint teams when he arrived a year and half ago,” said Thomas Galizia, global chief commercial officer for the Alphabet/Google alliance at Deloitte Consulting, a Google Premier Partner.

Google Cloud and Deutsche Bank yesterday said they’re partnering to “redefine” how Germany’s largest lender -- which has a stronghold in Europe and a presence in the Americas and Asia Pacific -- develops and offers its financial services. They’ve signed a letter of intent and, in the next few months, plan to close what’s expected to be a 10-year deal under which Google Cloud will help the lender accelerate its move to the cloud and transform its IT architecture, and the pair will co-develop next-generation, technology-based financial products for customers.

Sponsored post

Those efforts likely will include artificial intelligence/machine learning (AI/ML), data analytics and other key Google technologies to help improve the customer experience, reduce risk and bring new products and services faster to market, according to Google Cloud president Robert Enslin.

“During the RFP (request for proposals) and due diligence period, we were evaluated through real coding exercises, including sessions measuring our ability to co-innovate with Deutsche Bank,” Enslin said. “We now have a real opportunity to provide the best of Google Cloud technology and Deutsche Bank’s domain expertise to transform not only the bank, but the financial services industry overall. This strategic partnership includes providing know-how and resources from across Google to make it successful.”

That’s the most exciting aspect of the deal to Galizia -- that it’s focused as much on re-engineering the future of banking as it is at driving step function cost optimization, he said.

“Co-innovation and co-development of new products and enhanced services are key to providing better customer experiences, products and outcomes,” Galizia said.

Financial services is one of six markets – the others are health care, manufacturing and industrial, the public sector, retail, and media, telecommunications and entertainment -- that Kurian has targeted for Google Cloud to deliver industry-specific solutions.

Much of Deutsche Bank’s cloud migration work to date has been focused on building out its private cloud environment, on which nearly 50 percent of its workloads now run, and it now wants to push into the public cloud at an accelerated pace.

“Our goal will be to transform and optimize Deutsche Bank’s current systems in a phased approach,” Enslin said.

Potential use cases stemming from the partnership include assisting treasury clients with day-to-day tasks such as cash flow forecasting and risk analytics, and providing advanced security solutions to safeguard customer accounts. For Deutsche Bank’s private banking business, the focus will be on digital and intuitive solutions to simplify employee and customer interactions.

"The partnership with Google Cloud will be an important driver of our strategic transformation," Deutsche Bank CEO Christian Sewing said in a statement. "It demonstrates our determination to invest in our technology as our future is strongly linked to successful digitization. It is as much a revenue story as it is about costs."

Intent on recovering from years of losses, Sewing last July unveiled a restructuring plan to make the lender more profitable and to drive sustained growth. That plan included investing 13 billion euros in technology by 2022. Deutsche Bank also hired Bernd Leukert, a former member of SAP Digital Business Services’ executive board, as its head of technology, data and innovation in September.

Google Cloud, meanwhile, last month hired Yolande Piazza, the former CEO of Citi FinTech, as its vice president of financial services sales. She’ll also lead its financial services customer engineering teams.

The migration of Germany’s leading bank to the cloud is a “seminal moment” in IT for financial services, according to Tim Estes, founder and CEO of Digital Reasoning, a Franklin, Tenn.-based artificial intelligence solutions provider and Google Cloud strategic partner.

“It represents a remarkable evolution in terms of privacy and security maturity with the adoption of cloud technologies for Deutsche Bank’s most sensitive data,” Estes said. “The efficiencies and potential for understanding data that is unlocked through cloud-scale processing will likely open up major innovations. As a major partner of Google in financial services, we know that applications like those using deep NLP (natural language processing) and voice analytics are much easier to deliver and scale running on their cloud than traditional internally managed environments.”

During its collaboration with Deutsche Bank, Enslin said Google Cloud will discuss how its channel partner ecosystem can be leveraged to help make the bank’s digital transformation successful.

Google Cloud would not disclose the potential value of the deal. Bloomberg and Reuters, citing people familiar with the matter, reported that Deutsche Bank expects the partnership to yield a cumulative return on investment of 1 billion euros (the equivalent of about $1.1 billion), which a bank spokesperson declined to confirm.

In February, Deutsche Bank solicited proposals from major cloud providers -- Reuters reported this also included Google Cloud rivals Amazon Web Services and Microsoft Azure -- as part of its multi-vendor cloud strategy, under which the bank said it will continue to work closely with its existing technology partners. A Deutsche Bank spokesperson would not disclose what other cloud providers had been in the running for the contract or what other technology vendors are currently working with the bank.

In 2015, the lender signed a 10-year, multibillion-dollar deal with then Hewlett-Packard. Under the agreement, which primarily covered the bank’s wholesale banking operations, HP was to provide dedicated data center services on demand, including storage, platform and hosting, while the lender would retain responsibilities for its IT architecture, application development and information security. The contract reportedly shifted to DXC Technology, which was formed from HPE Enterprise Services unit’s spin-in merger with Computer Sciences in 2017.

“We believe that multi-cloud is the future, and we’re committed to working with Deutsche Bank’s partners to provide the best possible experience and outcomes for the bank and its customers,” Enslin said.

Google Cloud partner Imperva has seen an increase in financial services companies requesting application and data security capabilities, which makes the Deutsche Bank partnership “less of a surprise than it would have been otherwise when considering the smaller market share of Google compared to AWS or Azure,” said Terry Ray. Ray is the senior vice president who oversees financial services and healthcare strategies for Imperva, an application and data security provider based in Redwood Shores, Calif.

“Over the last several years, competition in financial services has accelerated innovation, development and modernization in the space,” he said. “This is exacerbated by the drive to Open Banking in Europe and parts of Asia."

Open Banking generally refers to the way that banks can make data and services available via interfaces -- generally APIs -- to authorized service providers or third parties that act on behalf of the customer who owns the account, according to Open Banking Europe.

Google Cloud’s announcement confirms its game plan of broadening its vertical positioning through strategic partnerships with industry leaders, according to Arseny Gorokh, senior director and Google Cloud business leader at Newtown, Pa.-based EPAM Systems.

“It reflects Google's view on expanding their footprint by playing the ‘partnership card,’” Gorokh said. “Instead of attempting to play catch-up to competitors by building homegrown solutions and tools, or racing toward numerous acquisitions, Google is doubling-down on its partner strategy. And the definition of ‘partnership’ is getting more and more complex here, since it genuinely embraces multiple forms of collaboration.”

The partnership will impact a much wider audience by paving the way toward real-world financial services solutions instead of lab-grown "proof of concepts" that cloud providers typically try to tackle, according to Gorokh.

“This audience includes a vast set of players, from smaller fintech startups that will build their end-offerings faster based on pre-packaged offerings that will come out of it, to larger solution integrators like EPAM, who will be able to capitalize on real business use cases and will act as accelerators for their customers to speed up their digital transformation journeys,” he said.

The partnership “places two international powerhouses at the forefront of a new wave of digitization in banking, further strengthening Google Cloud’s ability to empower and transform global markets,” according to Andrew Dunmore, managing director of financial services at Maven Wave, an Atos company and Google Cloud Premier Partner.

“By leveraging Google Cloud’s artificial intelligence, machine learning and data analytics, this innovative partnership will benefit the industry and lay a strong technology foundation for future deployments,” Dunmore said. “We estimate that the Deutsche Bank and Google Cloud alliance will compel broader outcomes across the industry.”

Google Cloud’s other banking and financial services customers include Frankfurt’s Deutsche Börse Group, a securities industry services provider; London-based Lloyds Banking Group; USAA, the San Antonio, Tex., group that provides insurance, banking, investments and retirement products to U.S. military members and their families; Atom Bank, the United Kingdom’s first app-only bank; and PayPal, which is based in San Jose, Calif.

The Google Cloud-Deutsche Bank announcement came on the same day that the New York State Department of Financial Services announced the bank had agreed to pay $150 million in penalties for significant compliance failures related to its financial dealings with convicted sex offender Jeffrey Epstein.