Google and Deutsche Bank AG have agreed to form a long-term partnership. The collaboration describes the US technology company Google providing cloud computing capabilities to Deutsche Bank, Frankfurt’s largest lender.
“The partnership with Google Cloud will be an important driver of our strategic transformation,” Deutsche Bank Chief Executive Officer Christian Sewing said in a joint statement, confirming an earlier Bloomberg News report. “It is as much a revenue story as it is about costs.”
According to subject matter experts, the contract will last at least ten years, and Deutsche Bank will make a cumulative return on investment of EUR 1 billion (USD 1.1 billion) based on the alliance. They also specified that companies plan to make joint investments in technology and share the resulting revenue. Therefore, engineers from both firms would work and develop products together.
No facts were revealed on how much Deutsche Bank will pay for Google’s services, and cost savings expected to be generated from the arrangement.
Interestingly, European banks have also started to invest billions of euros in modernizing their IT to put their data on the cloud. This acted as a rejuvenation of ideas for Google, Amazon.com Inc., and Microsoft Corp., reported by Bloomberg Survey.
What is being brought to the table for Google?
Google is surely benefitted as it tries to show that the cloud business can service the financial sector. The initiative of Thomas Kurian, Head of Google’s Cloud Division, has made the financial industry as one of the key customers since his joining in 2018. Before Deutsche Bank, the only financial customer of Google was HSBC Holdings Plc.
“We’re excited about our strategic partnership and the opportunity for Google Cloud to be helpful to Deutsche Bank and its clients as they grow their business and shape the future of the financial services industry,” Alphabet Inc. and Google’s CEO Sundar Pichai said in the press release.
From the latest cloud pitch of Google, it is clear that there are plans to involve its advertising business and stable of engineers. The popularity of the US firms and “the likes of Google” has stoked concerns in Europe’s technology industry banking executives, causing a threat to traditional banks and creating pressure on them to develop banking alternatives.