Oversight and controls

Managing non-financial risks

In brief

  • Enhancing risk management is central to cultural change
  • House of Governance reinforces structures and increases transparency
  • Three Lines of Defense strengthen controls

Clear responsibilities and robust controls are vital to help manage risks and rebuild trust. In 2014, we reaffirmed our strong commitment to responsible management and efficient control structures through the House of Governance initiative and Three Lines of Defense program. Both form a central part of our commitment to cultural change.

Clarifying governance and responsibilities

To reinforce the corporate governance rules and mechanisms for senior management in line with new statutory requirements, Deutsche Bank’s values and beliefs (see Deutsche Bank’s Values and Beliefs), as well as recognized best practices, the Management Board established the House of Governance. This initiative enhances and harmonizes the Bank’s governance structures. It increases the transparency of its organization and responsibilities. The House of Governance initiative is headed by Deutsche Bank’s Chief Governance Officer and focuses on the Management Board and the next two hierarchical levels, i.e. the Bank’s senior management.

Strengthening controls

700 people

were added to our front office supervisory capacity to strengthen our Lines of Defense

The Three Lines of Defense program is an integral part of Deutsche Bank’s strategic agenda. It was initiated by the Management Board in the context of heightened regulatory standards. The program builds on lessons learned from past control failures and aims to reinforce Deutsche Bank’s non-financial risk management capabilities and compliance culture across all corporate divisions and infrastructure functions. Furthermore, it ensures consistency across the ongoing control enhancement initiatives throughout Deutsche Bank.

Deutsche Bank’s Three Lines of Defense


Relevant unit


First Line

Business divisions and infrastructure functions

Ultimately accountable for all risks and controls in all business processes

Second Line

Control functions

Responsible for Deutsche Bank’s policy framework and independent risk assessment

Third Line

Group Audit

Responsible for ensuring independent and objective assurance on the effectiveness of risk management, internal controls and governance processes

In 2014, we reviewed the governance processes across all non-financial risk categories and refined risk and control responsibilities across all Lines of Defense. We also bundled and centralized certain central control units to reinforce the divisions’ accountability in the management of their control environment. (See Control processes)

Engaging with regulatory and political audiences

Constructive engagement with regulatory and political audiences ensures that policy supports the continued growth of competitive financial markets.

Deutsche Bank’s Government & Regulatory Affairs Department supervises the Bank’s response to new regulation and any potential remediation actions through the Group Regulatory Contact Office, which links our business and control functions in order to ensure a coordinated and effective approach to regulatory developments.

As of November 2014, the prudential supervision of Deutsche Bank AG and its subsidiaries was transferred from the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and Deutsche Bundesbank to the Single Supervisory Mechanism (SSM) of the European Central Bank (ECB). The ECB has established a Joint Supervisory Team (JST) to oversee Deutsche Bank, led by an ECB team that also comprises divisions at BaFin, Deutsche Bundesbank and other national regulators in European countries where Deutsche Bank is located and which are part of the SSM.

In preparation for the SSM, we established a global Regulatory Management Team in 2014. It serves as a central point of contact for any interaction with Deutsche Bank’s primary financial supervisory authorities in Germany, the US, the UK, Singapore and Hong Kong. We also strengthened our Government & Regulatory Affairs teams in key locations around the world.