Tech in synch

Cash management

Tech in synch

October 2019

Rene Keller, Chief Data Officer and Group Innovation at Deutsche Bank, explains why clients, fintech and Big Tech should work with banks to not only make sense of legacy data, but create new ways of moving money more efficiently

What made you choose information technology (IT) as a career?

Growing up in Zurich, I was always interested in engineering. I remember the early 1990s when the first PCs came along and soon everyone had their own machine.1 I was fascinated by the potential, so I did a computer science degree.

It was a very technical degree where we learned to write compilers and wrote our programs in machine code. But later I found the real potential was not so much the technical engineering, but more the ‘human engineering’ that brings success.

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Turning to your early roles in banking, what information trends did you observe?

I’ve been on the investment banking and the private banking side in various IT roles at Credit Suisse and UBS, and both sides have been digital for decades. Trading was – and still is – about the integration of information and making that information available to the decision-makers in real time and in a form they can execute against. It’s always been a race to use highly sophisticated technology to create an edge for the firm and the clients.

Private banking, by contrast, is about using information to help clients make longer-term decisions. As clients became better informed through the internet and different platforms, we provided our advisers with smart analytical information about markets, and the value was in matching that to the investment portfolio or the strategy of their clients.

 

When did the opportunity to make a real difference in the IT industry first present itself?

I moved from Swiss Life in Zurich to Dublin in 2012 to join a fintech (formerly Information Mosaic, now IHS Markit) which developed securities post-trade solutions with a focus on corporate actions processing for tier-one banks, including UBS, Northern Trust and ING. After analysing their back-office processes, we on-boarded them onto a process that the company designed.

Our clients wanted to evolve the product further with us. This was the first time that I came into contact with agile development, and we even let the clients join our agile teams to steer that development. Those clients knew exactly what we were doing and loved the limited bureaucracy and administration, speed of delivery, the quick time to market, full transparency and the ability to see the results and make amendments very quickly.

By going beyond the requirements of PSD2, we have a much wider interface with about 2,500 developers on our API portal and 19 live solutions

What made you leave Information Mosaic to work for Deutsche Börse?

It got sold to a global solution provider2 which was not where I wanted to be and Deutsche Börse came along with a very interesting offer in 2014. As CIO based in Frankfurt, the challenge was to restructure the IT organisation and bring IT to function across the entire firm from trading through to clearing and settlement.3 Thanks to an agile team that could make decisions quickly, we successfully implemented a new clearing platform.

 

With your experience at the stock exchange, can you comment on how application programming interfaces (APIs) could work in the securities services and payments world?

An exchange like Deutsche Börse – which operates a vertically integrated model with trading, clearing and settlement all under one roof – is constantly exchanging information with its financial services institution clients in specific and standardised formats. So for them APIs, which are nothing more than a well-defined interface for the way you exchange information, have a long tradition. But an exchange only interacts with large financial institutions, not end-clients.

However, in the retail and corporate banking space, this innovation is dependent on the ability to standardise APIs in a time-critical manner, just as plugs are standardised to fit power sockets in walls. This is not as critical for exchanges, which depend on a relatively stable and high-performing infrastructure underneath and do not need to communicate with the end-user.

 

How relevant are APIs to the bank?

They are very relevant and, for me, a dream come true. When I started in IT, there were about 100 different hardware platforms, operating system programming languages and database systems. You almost had to be an artist to create a picture that brought this all together on a canvas in order to create a solution.

However, APIs present a very standard and clear way of exchanging information because they can be plugged in anywhere. It is about removing and managing complexity. This in combination with cloud computing, and the availability of infrastructure at a very low price point, makes it possible to develop new solutions very quickly. Innopay’s Open Banking Monitor highlights the hard work our teams have put in to make the API portal a good experience for developers. The more developers like it, the more likely they are to build solutions from it.

 

Rene Keller
Profile: Rene Keller
Current role: Chief Data Officer and Group Innovation at Deutsche Bank
Former roles: Group Chief Information Officer at Deutsche Börse; Chief Operating Officer at Information Mosaic; Head of Global Core Banking at Credit Suisse
Studied at: University of St. Gallen (MBA), ETH (Master of Science, computer science)

You returned to the banking sector just as PSD2 was unfolding. How did you seize the opportunity for innovation?

At Deutsche Bank we created a much wider interface than what PSD2 was actually asking for. We created hackathons and invited external firms to program against that API of PSD2, or as we call it ‘DB OpenAPI’. By going beyond the requirements of the regulations, we now have 19 solutions that are live and are adding value, and we have expanded from retail to wholesale, where we have about 2,500 developers on our portal.

 

Why should innovation be ‘business as usual’?

Innovation needs to happen everywhere in companies, and it’s all about the culture. Questioning the way we do things and putting new technology in place can help us to do what we do more efficiently. Then there is the case of how we use innovation from the client’s perspective. One scenario is to invite clients in to have a whiteboard session, in order to hear what their real needs are and co-create solutions.

 

How are we harnessing data to deliver meaningful analytics to clients?

Analytics are meaningful to clients when they show relevant and useful insight around usage of data and prediction of events. We are doing this right now and can certainly add more value with the APIs and enhanced data analytics capabilities that we have. It is about developing these capabilities around regulatory initiatives, such as know your customer and PSD2, so that clients not only trust us with their money, but also with their data.

 

And finally, how do banks remain relevant in a platform/fintech universe?

I think there is a big transformation happening and the face of banking is going to change. We need to work with fintechs, but I don’t think they are the biggest challenge. It’s the Big Techs that will have a much bigger impact – Facebook’s Libra project is a case in point. On the other hand, we can learn from these companies. In some areas we will be a fierce competitor, and in other areas we will be working with them.

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Sources

1 First 64-bit microprocessors; the first 64-bit variant of MIPS, the MIPS R400 was introduced in 1992. See https://bit.ly/2Yos5Y2 at en.wikipedia.org
2 Information Mosaic was sold to IHS Markit in June 2015. See
https://bit.ly/2Z957RR at ihsmarkit.com
3 See
https://bit.ly/310XC03 at deutsche-boerse.com

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