Deutsche Bank, which has weathered negative publicity in recent days thanks an enforcement action against one of its affiliates, now suffers another setback. Germany’s financial regulator steps up scrutiny of its operations. The bad news comes just as the bank seeks to expand in the crypto space.
As a result of a barrage of complaints about the customer experience at Deutsche Bank’s Postbank division, the state regulator, BaFin, said on Monday it had decided to appoint a monitor.
BaFin Requires Scrutiny of Deutsche Bank Affiliate
The director of BaFin used the term “unacceptable” in regards to Postbank’s unreliable online services, said a Reuters report. Not to mention the difficult of reaching customer service for help.
As a consequence, BaFin plans to dispatch a monitor. This monitor will oversee operations and assess progress in addressing these serious concerns. It will help advance BaFin’s stated goal of tightening control over the financial markets and punishing noncompliance harshly.
Learn more about the status of fintech innovation and digital assets in Germany.
Deutsche Bank began to buy up segments of Postbank in 2008. The $6.3 billion acquisition closed in 2012. In July of this year, the firm claimed to have carried out the transition of 12 million Postbank customers to its own IT systems.
But, as the events of recent days make clear, many Postbank customers are not at all happy with the service they are getting. And place the blame for their frustrations squarely on their new host.
As if this were not enough bad news for one week, revenue from Deutsche Bank’s investment banking division reportedly fell in the first nine months of 2023 compared to a year before, from $142 million to $127 million.
Deutsche Bank Seeks to Be a Force in Crypto
Negative publicity keeps pouring in. Just last week, the US Securities and Exchange Commission (SEC) fined a Deutsche Bank affiliate $25 million for reporting failures. The bank must weather heightened fear, uncertainty, and doubt (FUD) at a sensitive juncture.
In June, BeInCrypto reported on Deutsche Bank’s efforts to seek out new revenue streams. The bank applied to BaFin for a license to be a digital asset custodian. Following up on plans announced in 2020.
BeInCrypto also noted that Deutsche Bank’s Singapore division had made a foray into tokenization with the trial of an investment platform in collaboration with Memento Blockchain.
And, in February, BeInCrypto described how Deutsche Bank had entered into talks about potential investments in a pair of Frankfurt fintech companies. Both active in the digital assets and crypto trading spaces.
Clearly, Deutsche Bank would like to expand its presence in the digital assets space. A need that it must feel all the more acutely in the light of this year’s disappointing figures.
For any of these plans to come to fruition requires significant goodwill on the part of BaFin. Time will tell whether the bank can correct the operational woes that have eroded the trust of thousands of citizens.
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