Satisfied and loyal clients are vital for continued success
In brief
- Client centricity is central to Strategy 2015+
- Introduction of a common approach to client segmentation
- Cross divisional collaboration intensified
Client centricity is one of our core values and is central to our Strategy 2015+. We recognize that satisfied, loyal clients are vital for our continued success. This requires a culture based on client needs rather than an approach that focuses on products or transactions. Deutsche Bank’s leadership launched a major initiative in 2014 to put this client-centric culture into practice.
We need to improve our understanding of clients and gauge their needs better in the rapidly changing business environment. Putting clients first means analyzing who our clients are, what they want, how well we currently meet their needs, and how we can add value for them in the future. Only then will we be fully able to help clients meet challenges such as shifting demographics, globalization, digitalization, evolving consumer behavior and climate change.
Two concepts are central to this commitment, which we are embedding across our businesses:
- Client selection: a much deeper understanding of our current or prospective clients and the longer-term prospects of a business relationship for both parties
- Product suitability: appreciating our clients’ needs, their specific risk appetites and financial skills, combined with a broader perspective of what is right for other external stakeholders
Client selection is increasingly important for our businesses. It is a key feature of our reputational risk processes to ensure we safeguard and uphold integrity and prevent abuse of the financial system. (See Control processes) We are reviewing our existing client base and terminating relationships if we cannot create or maintain sustainable, mutual benefits, or if we have well-founded concerns about reputational risk and integrity.
We also take a robust approach to product suitability. In line with our Product Principles, we refrain from offering certain types of products to our retail clients. (See Private and business clients) Similarly, we no longer offer public sector clients in Germany certain derivative products unrelated to hedging their underlying business. We only offer investment products to these clients based on strict suitability criteria.
Living the values
In 2014, the Credit Risk Management team raised concerns about the reputational risk from continuing to do business with a hedge fund client that was facing legal action. The client represented a lucrative source of revenue but the team was concerned about the potential long-term implications for Deutsche Bank. The issue was escalated to the Regional Reputational Risk Committee. It was then reviewed by the Group Reputational Risk Committee, which judged that while the issue was not clear-cut, maintaining the relationship would be inconsistent with Deutsche Bank’s values and beliefs. As a result, Deutsche Bank ended its relationship with the client, even though competitors continued to do business with the client.
We evaluate the tax considerations of products with regard to the intent and spirit of applicable tax laws, the social context within which the Bank operates, and the Bank’s standing and reputation with the public, tax administrations, regulators, and political representatives.
Putting client centricity into practice
A new initiative launched in 2014 will help us to develop client-oriented strategies and offer a full suite of effective products and services across the business divisions. We are introducing a common approach to client segmentation, analysis and measurement of satisfaction, with a more systematic approach to gathering feedback directly from clients.
This requires coordination across our divisions and processes, and greater collaboration between Deutsche Bank’s divisions. An early example of such collaboration is an agreement between Corporate Finance and Deutsche Asset & Wealth Management to enhance service for high-net-worth clients. We have also developed a new framework to govern the selling of products and services across divisions.
Clients will benefit from a more seamless experience when they work with different parts of the Group. The business will benefit from the creation – as far as possible – of a single client dashboard providing a Group-wide view of key customer metrics.
Satisfied, loyal clients are central to our success. Building on existing processes we have determined a Net Promoter Score (NPS) for all client segments to create a consistent and systematic measurement of client satisfaction across the Bank, supporting the Bank’s goal to foster client centricity.