{"id":22172,"date":"2017-11-14T12:46:18","date_gmt":"2017-11-14T17:46:18","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/theres-no-place-like-home-deutsche-banks-return-to-germany\/"},"modified":"2017-11-14T12:46:18","modified_gmt":"2017-11-14T17:46:18","slug":"theres-no-place-like-home-deutsche-banks-return-to-germany","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/theres-no-place-like-home-deutsche-banks-return-to-germany\/","title":{"rendered":"There\u2019s No Place Like Home: Deutsche Bank\u2019s Return to Germany"},"content":{"rendered":"

Even before the Brexit vote in June 2016, Deutsche Bank\u2019s CEO John Cryan shifted the direction of the company to its home market. \u201cOur core business will be international banking, international capital markets, rooted in Germany.\u201d[1]<\/a> This action coupled with Brexit has created an unique opportunity for Deutsche Bank to proactively reorganize its operations ahead of the official exit of the UK in May 2019.[2]<\/a><\/p>\n

Implications<\/strong><\/p>\n

With the UK voting to leave the European Union (EU), London\u2019s status as the financial center of Europe is likely to be compromised. Deutsche Bank, which books hundreds of billions of euros of non-UK business through London, must mitigate disruptions to client relationships and thus, its business.[3]<\/a> To accomplish this, Deutsche Bank is acting now by \u201cassuming a reasonably worst outcome\u201d or a \u2018hard\u2019 Brexit.[4]<\/a> A \u2018hard\u2019 Brexit means the UK leaves the EU and does not remain a member of the European Economic Area (EEA).[5]<\/a> As a member of the EEA, member-states have agreed to a common body of financial regulation which allows firms to offer services in all member-states after receiving authorization in one. Following the official Brexit, the UK may no longer enjoy this privilege.<\/p>\n

Action<\/strong><\/p>\n

To combat this uncertainty, Deutsche Bank has taken several decisive actions. First, the firm has decided to transfer the \u201cvast majority\u201d of its assets in the UK global markets business to Frankfurt, Germany, a current EU member-state.[6]<\/a> With its economic stability, highly qualified talent, and the headquarters of the ECB, Frankfurt has the potential to become a global financial services hub.[7]<\/a> Secondly, the company recently announced that it will move four thousand of its UK employees, approximately half of the UK workforce, to Frankfurt.[8]<\/a> Thirdly, the firm is proactively contacting clients to resolve conflicts in legal documentation. Finally, the firm is working with German authorities to amend labor laws that prevent firing as well as working with regulatory bodies to establish clearinghouses outside of the UK to address potential disruptions in the medium-term. [9]<\/a><\/p>\n

Additional Considerations<\/b><\/p>\n

In my opinion, Deutsche Bank should also consider two other important aspects of its supply chain: the effects on employee acquisition\/retention and the disruptions to the cycle of information between clients and the firm. The transition to Frankfurt presents a change at the top of the talent acquisition funnel due to language barriers, work authorizations and differences in corporate culture. Deutsche Bank must continue to prioritize an internationally-focused, inclusive, and progressive culture in the German business context. Additionally, Deutsche Bank must also consider how information, whether client orders, confirmations, or contracts, flow through London and Frankfurt to the rest of the world. From a trading perspective, the firm must determine how client relationships will be managed across sales and trading teams. A great customer experience should not be compromised. To accomplish this, Deutsche Bank should fully understand the implications to its supply chain both from a talent acquisition perspective and through the flow of information.<\/p>\n

Future Uncertainty<\/strong><\/p>\n

Given the competitive landscape and the recent regulatory and financial struggles of the company, there is little room for error. Although the company is assuming a \u2018hard\u2019 Brexit, what are the implications on the business if a \u2018soft\u2019 Brexit occurs? Should the company take the most conservative approach when dealing with uncertainty?<\/p>\n

Word Count: 762<\/p>\n

[1]<\/a> Gould, Jonathan. “Deutsche Bank CEO aims for universal bank with German roots.”\u00a0Reuters<\/em>, March 2, 2016. Accessed November 12, 2017. http:\/\/www.reuters.com\/article\/us-deutsche-bank-postbank-ceo\/deutsche-bank-ceo-aims-for-universal-bank-with-german-roots-idUSKCN0W40ZZ.<\/p>\n

[2]<\/a> Arnold, Martin, Katie Martin, and Laura Noonan. “Citigroup and Deutsche Bank give Frankfurt a Brexit boost.”\u00a0Financial Times<\/em>, July 20, 2017. Accessed November 11, 2017. https:\/\/www.ft.com\/content\/1b38eb1a-6d55-11e7-b9c7-15af748b60d0.<\/p>\n

[3]<\/a> Ibid.<\/p>\n

[4]<\/a> Ibid.<\/p>\n

[5]<\/a> Armour, John. 2017. “Brexit and financial services.”\u00a0Oxford Review Of Economic Policy<\/em>\u00a033, S54-S69.\u00a0Business Source Complete<\/em>, EBSCOhost<\/em>\u00a0(accessed November 11, 2017).<\/p>\n

[6]<\/a> Arnold, Martin, Katie Martin, and Laura Noonan. “Citigroup and Deutsche Bank give Frankfurt a Brexit boost.”\u00a0Financial Times<\/em>, July 20, 2017. Accessed November 11, 2017. https:\/\/www.ft.com\/content\/1b38eb1a-6d55-11e7-b9c7-15af748b60d0.<\/p>\n

[7]<\/a> Koch, Christian. 2017. “Frankfurt: The German finance hub is touted as the city to lure bankers from Brexit Britain. But whether at London’s expense or not, its trade environment is creating opportunity for UK business. Leaders and experts explain.”\u00a0Director<\/em>\u00a070, no. 8: 40-43.\u00a0Business Source Complete<\/em>, EBSCOhost<\/em>\u00a0(accessed November 11, 2017).<\/p>\n

[8]<\/a> Sidders, Jack, and Steven Arons. “Deutsche Bank Seeks New Post-Brexit Frankfurt Office.”\u00a0Bloomberg L.P.<\/em>, November 1, 2017. Accessed November 13, 2017. https:\/\/www.bloomberg.com\/news\/articles\/2017-11-01\/deutsche-bank-is-said-to-seek-new-post-brexit-frankfurt-office.<\/p>\n

[9]<\/a> Arnold, Martin, Katie Martin, and Laura Noonan. “Citigroup and Deutsche Bank give Frankfurt a Brexit boost.”\u00a0Financial Times<\/em>, July 20, 2017. Accessed November 11, 2017. https:\/\/www.ft.com\/content\/1b38eb1a-6d55-11e7-b9c7-15af748b60d0.<\/p>\n","protected":false},"excerpt":{"rendered":"

How isolation in the form of Brexit influenced the company\u2019s decision to relocate its UK operations to Frankfurt<\/p>\n","protected":false},"author":10327,"featured_media":22175,"comment_status":"open","ping_status":"closed","template":"","categories":[2515,3239],"class_list":["post-22172","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-international-trade","category-isolationism","hck-taxonomy-organization-deutsche-bank","hck-taxonomy-industry-financial-services","hck-taxonomy-country-germany"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2017\/","yoast_head":"\nThere\u2019s No Place Like Home: Deutsche Bank\u2019s Return to Germany - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/theres-no-place-like-home-deutsche-banks-return-to-germany\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"There\u2019s No Place Like Home: Deutsche Bank\u2019s Return to Germany - Technology and Operations Management\" \/>\n<meta property=\"og:description\" content=\"How isolation in the form of Brexit influenced the company\u2019s decision to relocate its UK operations to Frankfurt\" \/>\n<meta property=\"og:url\" content=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/theres-no-place-like-home-deutsche-banks-return-to-germany\/\" \/>\n<meta property=\"og:site_name\" content=\"Technology and Operations Management\" \/>\n<meta property=\"og:image\" content=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/DB2.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2048\" \/>\n\t<meta property=\"og:image:height\" content=\"1152\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/theres-no-place-like-home-deutsche-banks-return-to-germany\\\/\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/theres-no-place-like-home-deutsche-banks-return-to-germany\\\/\",\"name\":\"There\u2019s No Place Like Home: Deutsche Bank\u2019s Return to Germany - Technology and Operations Management\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/theres-no-place-like-home-deutsche-banks-return-to-germany\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/theres-no-place-like-home-deutsche-banks-return-to-germany\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/wp-content\\\/uploads\\\/sites\\\/4\\\/2017\\\/11\\\/DB2.jpg\",\"datePublished\":\"2017-11-14T17:46:18+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/theres-no-place-like-home-deutsche-banks-return-to-germany\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/theres-no-place-like-home-deutsche-banks-return-to-germany\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/theres-no-place-like-home-deutsche-banks-return-to-germany\\\/#primaryimage\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/wp-content\\\/uploads\\\/sites\\\/4\\\/2017\\\/11\\\/DB2.jpg\",\"contentUrl\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/wp-content\\\/uploads\\\/sites\\\/4\\\/2017\\\/11\\\/DB2.jpg\",\"width\":2048,\"height\":1152,\"caption\":\"The Deutsche Bank AG company logo is seen displayed outside their headquarters in Frankfurt, Germany, on Monday, Sept. 10, 2012. 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