Deutsche Bank CEO Says AI Will Help Him Cut Tens Of Thousands Of Jobs

Tyler Durden's picture

While many in the financial services industry are dreading the day that AI technology becomes advanced enough to render broad swaths of the human workforce obsolete, Deutsche Bank’s John Cryan ironically sees the technology as something that might help him save his job.

The leader of the biggest German lender has been tasked with putting the bank back on sound footing, regaining market share and - of course - reining in costs, including the bank’s bloated headcount. DB has 97,000 employees worldwide, about double the number of employees at many of its European peers.

And as the bank has made about half of the 9,000 cuts promised by Cryan in a five-year restructuring plan, the CEO told the Financial Times that machine learning and automation technology could help him cut tens of thousands of additional jobs, particularly in the bank’s back office.

Deutsche has made about 4,000 of the 9,000 job cuts promised under a five-year restructuring plan announced in late 2015. Mr Cryan said many of the additional cuts would come through using technology to boost efficiency in the bank’s processes.

 

“There we’ve got the most to gain,” he said. “We’re too manual, which can make you error-prone and it makes you inefficient. There’s a lot of machine learning and mechanisation that we can do."

 

Mr Cryan said the ratio of front office, revenue-generating staff, to back office people who keep the bank’s systems running, was “out of kilter” at Deutsche. 

When asked about the specific number of employees at risk of being replaced, he told Laura Noonan at the Financial Times it would be a "big number."

Cryan’s remarks come after the bank reported a tangible return on equity of just 4% for the third quarter, far short of its medium-term target of 10%. Of course, hitting that goal will be virtually impossible as long as the European Central Bank is embracing NIRP. As we noted yesterday, DB’s investment bank is looking to the risky leveraged loan market, where it can collect juicy fees from US corporates.

While the bank’s headcount has been reduced elsewhere, the Frankfurt-based lender added 24 managing directors and directors to its US corporate finance business this year.

As the FT points out, DB’s staff has taken umbrage in some of Cryan’s more critical remarks about the staff bloat at the bank. Back in September, Cryan said the bank’s accountants “sped a lot of time basically being abacuses”  and are ripe for being automated.

As the bank works to integrate its retail network with Postbank, its German retail banking subsidiary, Cryan said he closing retail branches and pushing more of its customers to do their banking online could help the bank cut costs.

Furthermore, Cryan believes entire industries will be able to replace workers with robots, not just Deutsche Bank. "We have to find new ways of employing people and maybe people need to find new ways of spending their time," he said, according to CNBC. "The truthful answer is we won't need as many people."

Cryan’s views on AI are diametrically opposed to Elon Musk’s warnings that AI is the “single biggest threat to humanity” and that governments should immediately move to regulate the technology.

However, some experts say that any meaningful advancements in AI that would render a significant portion of the US labor force obsolete are still far in the future, and that the technology has been incredibly overhyped. According to Gartner Inc.’s hype cycle for new technologies, the hype surrounding machine learning is at the “peak of inflated expectations” and heading to the “trough of disillusionment"...

 

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totenkopf88's picture

JFC- how many employees does it take to BTFD? Can't a few H-1Bs, or the German equivalent, sit in a DB office at some Bloomberg terminals and buy FANGs with the ECB's money all day?

MozartIII's picture

The machine algos feed off of each other. This may be the greatest gift and robbery of all time. "Smart" college kids with no trading experiance put the shit together, yet there are major holes.

 

If the big banks go all AI. This might be the best gift of the year! Looking like it so far!!

peddling-fiction's picture

You don't say you will ax them, unless you want a riot.

NoDebt's picture

That fucking graph at the bottom.  What kind of fuckery is that?  That's fucking nuts.  Makes me want to pick up a nearby stick and just hit it as hard as I can.

 

 

Mineshaft Gap's picture

"The Trough of Disillusionment."

I'll tell you what the trough of disillusionment is.

It's when the market crashes, and there are no humans left in the bank to jump out the windows!

There's your real fucking Turing test. If we don't get AI to the point where it feels such abject hopelessness that it unplugs itself and jumps, straight out the 20th floor and onto a driverless Uber flying car, which in turn spins out of control and crashes through the window of an Amazon-Whole Foods, by now a ball of flame that causes the transgender robot cashier blabbing about the benefits of kelp salad in mitigating menstrual cramps to explode, we will have failed. 

spag's picture

its unforgivable for someone as old as him to think AI will replace anyone. Having been involved in the earlier AI bubble in the 80s when all the banks thought they could replace everyone with expert systems which died pretty rapidly.

 

We've gone round in a big circle jerk because the kids dont bother to ask the greybeards who did the work about their experiences.

DipshitMiddleClassWhiteKid's picture

I worked at a large life insurance company where they were still using Windows XP and alot of the processes were being done manually in Excel/Access...and from what I hear up until recently alot of the big banks are in the same boat. 

 

AI isnt going to kill the jobs, but VBA for Excel certainly will and has probably done more damage to the corporate workforce than Deep Learning and other ML algos (I am master race at Excel and know how to code in a few languages)

 

 

justa minute's picture

ai is a hoax just like the moon walk but the lies just keep on coming, the arrogance of man is the only thing that should be worried about.

Bobbyrib's picture

The big banks will get a bailout or the trades will be unwound. TBTF are TBTF, because they bought governments throughout the world.

SHEEPFUKKER's picture

Fuck this dick....having said that, isn't his # 1 priority his shareholders(as it relates to our present system)? 

Savvy's picture

Waiting for a teller at the bank a while back, this employee (probably sub-contract) was pushing online banking. Offered me a pamphlet, told me how secure it is. I said no thank you. She got a little snotty, said "enjoy your wait in line." I said I prefer inline banking to online.

She must have been successfull in her push to online banking because she isn't there anymore.

I Write Code's picture

If artificial intelligence will eliminate thousands of jobs, imagine what real intelligence could do.

Giant Meteor's picture

I say good for him to announce. I'd say to all those low level, highly expendable servants in the money changer "vector", you've been put on official notice. There is no loyalty, nothing is sacred, and you won't be joining the club, ever. Don't get mad, get even. My suggestion is to play along as necessary, work hard, just so long as you can get the goods while the gettin is good. Prepare for your new life, and to turn on your financial overlords with said goods. You know, just do it ...

We'll keep the lights on for ya ..

DarthVaderMentor's picture

What doesn't make sense to me is when globalist big shots like this Cryan keep talking about how AI will wipeout jobs like crazy why the globalist socialist leftist drones keep pushing for unrestricted immigration. It doesn't make sense unlkess they want to destroy the country. When you consider the massive unemployment we're going to see as we need less and less to run the economy thanks to AI, add to it the plagues the illegals will bring in, the only reason left that they could want for illegals flooding in is for short term political control by allowing illegals and convicted criminals to vote like McAuliffe did as governor in Virginia. 

Giant Meteor's picture

As always, it comes down to whose ox is being gored ..

Oh, and also the fog of bullshit ..

DarthVaderMentor's picture

They are so desperate....they've gone so tactical in their bullshit even an ox can see it coming......but maybe the FaceBook snowflakes cum drones in the Baltimore schools might not!

zvzzt's picture

"It doesn't make sense unlkess they want to destroy the country"

There is your answer.

My 2 cents: there is a conflict between the current socialist states (regardless of political party ruling, socialism is rife) and the relatively sudden growth of AI. Mechanics, software and power technology has been converging faster than most expected I think). So the relentless immigration on the one hand is needed to keep the near-term house of cards stutted while on the longer term a steady decrease in population would most likely be beneficial. 

 

Cardinal Fang's picture

Boy those Germans hate when shit gets 'out of kilter'...

DipshitMiddleClassWhiteKid's picture

Alot of corporate jobs/departments are bullshit jobs and managers hire people just to have someone to manage. They will make up busy work and buy into shitty software solutions that take forever to implemenet just to make a job for themselves.

 

If any of you goys have kids who are entering the workforce..I'd advise them to learn .NET programming (VBA/VB.nET/C#/ASP) and learn about automation. If you can automate stuff you will have job security.

 

 

 

 

Redneck Makin-tosh's picture

Programming sounds like too many late nights for easily compromised intelligence - few, if any, of the tech pioneers imagined they were enabling disingenious, moronic goons and perfecting such a shitty enslavement paradigm yet here we are - even bankers rejoice in the destruction of productivity!

I'd suggest mastery of the cabbage patch, marital arts and Hawkins Electrical (never know when you might need to taze a rogue .gov drone). For the intellectually minded McHarry's practical distiller and The London and country brewer make worthy reading companions.

Coldfire's picture

AI? Bullshit. You'd have to understand your processes - and their effect on the whole firm - before you could even begin "automating" or "mechanizing". And then the AI would have to be capable of governing that automation. It isn't. I submit that neither DB nor any other fractional reserve Ponzi is even remotely close to understanding their processes, let alone capable of modelling and automating them. IT is a Tower of Babel. AI? Stop embarrassing yourself, Cryan.

ds's picture

Yes. DB Asian outfits are still fiefdoms of cronies pushing products and services with mindsets of the pre GFC era. A pretentious global bank with decaying tentacles that they BS as their footprints. So you bet that Cryan is an Ai visionary ? Many parts of Asia financial markets do not have the infrastructures for you to connect/transact with gears that require sophisticated algos. Developing AI inhouse is a mirage, you start by purchasing bespoke products and breed a new 'data tribe' inhouse. Most of the incumbents (sorry) are deadwoods that will kill any AI culture. 

p.s. I know only Asia, where the promising break throughs will come from Hong Kong (front office) and Shanghai (back office). 

DoctorFix's picture

But of course this fucker will expect a nice fat "BONUS" in the tens of millions for his "efficiency".  I already hate every single company thats moved to automate so much that they don't need my money anymore.  Good luck you bastards!

OutaTime43's picture

AI will destroy so many jobs that , in the end, Deutsche Bank will have only 10 clients. 

julian_n's picture

AI - as in Artificial Insemination?

Is that using computers to screw your customers instead of real people?

Sudden Debt's picture

yeahyeah... I can't even understand why a bank needs people anyway.

Besides the loans and things like that which needs to be signed, everything else is much better off automated.

 

But robotrading... it only works when the markets move in a straight line. The markets are going up for almost a decade now and to write an algo that makes money on a straight line is easy.

But when panick sets in, those platforms go completly banana's.

AI my ass... do people really believe there's computers that can talk to you?

AI is nothing more then bloated programms that will freeze when it gets to complex.

Debugas's picture

basically he admits he is so dumb that he needs AI to help him manage his staff

He does not even realize that he had just admitted that the first person to be replaced by AI is he himself

AlbertthePudding's picture

All bankers everywhere are saying that!

Blue Steel 309's picture

When there are no jobs left, the Chozenites won't need us anymore.

Rex Andrus's picture

Buuulllshiiittt

This asshat would be amazed if he saw a barcode scanner. This marketing shit sandwich is FAANG self service wrapped in 100% hype smoke and mirrors "AI". You imperialist running dogs will be working for (((them))) for free even more than you already do, they'll be brainwashing your sperm and your heads will still be spinning about why you just can't get ahead. Stop the Carbon pirates.

oncemore's picture

the desparade guy needs a pretext to kick out ssome bankers:

The leader of the biggest German lender has been tasked with putting the bank back on sound footing, regaining market share and - of course - reining in costs, including the bank’s bloated headcount. DB has 97,000 employees worldwide, about double the number of employees at many of its European peers.