Deutsche Bank AG’s investment arm is likely to pull the plug on big parts of a massive IT revamp after the project ran into delays and cost overruns.
(Bloomberg) — Deutsche Bank AG’s investment arm is likely to pull the plug on big parts of a massive IT revamp after the project ran into delays and cost overruns.
The leadership of DWS Group under Chief Executive Officer Stefan Hoops is now discussing how to adapt the project codenamed Proteus and will likely cut it back as a result, the people said. That decision would effectively give up on the project’s overarching goal of taking the asset manager completely off its parent’s IT systems, the people said, asking not to be identified discussing internal matters.
Given how long big IT projects usually last, “it is adequate and prudent to constantly review and – where necessary – adjust the scope of the project and the speed of execution,” a spokesman said by email. “That is what the executive board is doing.“
DWS kicked off the large-scale project under Hoops’ predecessor Asoka Woehrmann in an effort to achieve cost savings while also highlighting the firm’s independence from Deutsche Bank. The asset manager said in its annual report issued in March that its “multi-year transformation project to replace the existing complex IT infrastructure” was “on track” after a first migration had been completed successfully.
The likely decision to scale back Proteus comes in the wake of an audit completed a few months ago that revealed substantial shortcomings, according to the people. Hoops has since assumed responsibility over parts of the project, they said.
Hoops previously promised to cut about €100 million ($107 million) in costs by the end of 2025. A significant portion of those savings would come from reducing the amount of fees DWS is paying Deutsche Bank for using its services and systems, he has said.
DWS has long pursued a goal to increase its independence from Deutsche Bank. It is a publicly listed company but Deutsche Bank owns about 80% and exerts strong control over it through a legal structure unique to Germany that restricts the influence of minority shareholders.
“We do not comment on potential internal discussions,” the spokesman said in the email. “The transformation to become a stand-alone asset manager remains an important project for us.”
The IT issues experienced by DWS come as parent Deutsche Bank is facing severe challenges over a systems integration at its Postbank retail unit. The lender had declared its so-called Project Unity complete in early July but two months later got told off by the German banking supervisor Bafin over a massive amount of client complaints.
Read more: Deutsche Bank Faces Watchdog Probe Over Issues at Postbank Unit
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