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

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"...