DB and Santander controlling costs through tech

Deutsche Bank and Santander Bank are deploying tech to simplify operations and cut costs, according to their earnings reports. 

Santander reported today that it saved 77 million euros ($83.6 million) in the second quarter through its global operations by deploying technology, and has saved $341 million since 2022, according to its earnings report.

“Our proprietary and global tech capabilities have generated 71 basis points in efficiencies so far,” Chief Executive Hector Grisi said during the bank’s earnings call today. “The progress over the last 10 years to simplify and align our model in all our businesses and now deploy our own tech stack is already evident and now depends on execution.” 

Santander reported an efficiency ratio of 41.3% in Q2, compared with 44.3% in Q2 2023. 

The Madrid-based $1.9 trillion bank is deploying technology in: 

• Customer experience, by digitalizing onboarding and simplifying product offerings for more digital sales; 

• Operations, by automating internal processes to make operations leaner; and 

• Global platforms, by merging global tech platforms to reduce operational costs. 

Santander aims to use its scale to roll out a global platform and put its applications and website on the cloud-based Gravity platform, developed in partnership with Google Cloud, according to the earnings report. The bank moved all of its corporate investment banking onto its Gravity platform last year. 

BY THE NUMBERS: In Q2, Santander reported: 

• Total income of $16.9 billion, up 9% year over year; 

• Net interest income of $12.3 billion, up 6% YoY; and 

• Information and technology costs of $706 million, up 7% YoY. 

FLASHBACK: Santander found over 60 uses cases for AI in its operations. 

The bank is using the tech to improve customer service by rolling out virtual assistants and helping its software engineers generate code, a spokesperson previously told BAN. 

AT DEUTSCHE BANK: Deutsche Bank is also deploying technology to reduce expenses. 

The $1.3 trillion bank reported adjusted costs of $5.4 billion in the second quarter, up 2% YoY, partly driven by higher information and technology expenses. 

Higher expenses were aligned with guidance provided at the start of the year “reflecting the bank’s efforts to streamline its technology platform,” the bank’s earnings report stated.  

Tech investments at Deutsche Bank in Q2 include: 

• Hiring 900 employees in business growth- and technology-related fields year to date; 

• Exploring AI use cases; and 

• Exploring quantum computing to improve its security against ransomware, denial of service and supply chain attacks. 

As of June 30, the bank had 89,470 employees, compared with 87,500 in Q2 2023, the earnings report stated.  

The bank reported total revenue of $8.2 billion, down 1.2% YoY. 

MARKET REACTION: Deutsche Bank shares were trading at $15.48, down by 9.13% at market close on July 24. The bank has a market capitalization of $30.94 billion. 

Santander Bank shares were trading at $5.04, up by 2.43% on July 24 at market close. The bank has a market capitalization of $78.64 billion. 

Editor’s Note: All figures converted to USD. 

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