ASSIGNMENT 2

Deutsche Bank: Pursuing

Blockchain Opportunities
SUBMITTED BY GROUP 1

SUBMITTED BY:

GROUP 1, FINTECH (TERM V), IIM

LUCKNOW
Akash Deep Mishra (PGP37335), Arpit
Singh (PGP37341) & Eshaan Kulshreshtha
(PGP37235)
 Discussion Points:
Question 1: Is blockchain technology a disruptive platform?

Solution: Yes, blockchain technology has disruptive potential for the

following reasons:
 The technology has the potential to become the system of records for
all transactions. In the banking industry, for example, blockchain
technology can create a lot of value in different parts within the bank.
Deutsche Bank developed the business case of blockchain for post-
trade and securities settlement, payments, and other forms of trade
finance transactions.
 Blockchain can keep track of payments, transactions and trades
involving bonds, equities, or loans—transactions that traditionally
required the involvement of banks, traders, exchanges, clearing
houses and other intermediaries. Where these transactions often took
days to clear, blockchain’s Distributed Ledger Technology (DLT)
offers the potential of shortening the time to minutes and doing so
without the use of physical intermediaries.
 Blockchain technology enables us to create "smart contracts". Smart
contracts are scripts that perform some determinate, event-driven
computation based on some inputs. These scripts are modular,
repeatable, autonomous, and can be deployed to the Blockchain. For
instance, in Deutsche Bank, Deutsche Lab modelled a corporate
bond as a smart contract, encoding executable lifecycle event triggers
—for example, coupon payment, change of ownership, principal
payment, interest payment and maturity. They also defined and
agreed upon appropriate smart contract technology. Subsequently,
they verified the smart contract over a blockchain, simulating multi-
party consensus and asset transfer.

For these reasons, blockchain technology has disruptive potential,

especially for baking and financial services industry.
Question 2: How did the Deutsche Bank managers lay the foundations
for commercializing blockchain? Which key decisions did they make?

Solution: In August 2014, Deutsche Bank managers Rhomaios Ram

and Paul Maley had an internal discussion about the changes Deutsche
Bank was facing in regard to the new global technology trends. To keep
up with the trends that was emerging, the bank needed to update its
banking infrastructure and ecosystem. This change proceeded from
Deutsche Bank’s new digital project, “Strategy 2020”, an effort and
commitment to become a more digital bank. The projects objectives are
to invest more assertively in digital technologies to seize new revenue
opportunities, devoting €1 billion to this project by 2020. One of the
technologies Deutsche Bank decided to focus on from the beginning
was blockchain. It was decided that more efforts should be taken to
create awareness regarding blockchain within Deutsche Bank. So few
managers started posting blog posts on the internal social media
platform of Deutsche Bank explaining and encouraging discussions
concerning blockchain and the future use cases that could be
implemented to disrupt banking industry. Further, Ram and Maley
hosted workshops with people from Global Market and Global
Transaction Banking with the goal to create more interest in this project.
The workshops were especially successful because people found the
project very innovative. Following this, the managers could identify the
right people within the company who were blockchain enthusiasts, who
were willing to work and take this project forward. One result was the
Deutsche Bank’s Labs which provided the team with updates on themes
from the innovation ecosystem.