The Frankfurt-based credit institute is also increasingly focusing on cooperation with young companies. Deutsche Bank In recent years, Deutsche Bank has not only established three innovation labs, but also supports young founders with financing issues and connects them with investors. Furthermore, the group has other interesting projects for startups in store, including the communication channel "Pitch Portal" and the support project "Made for Good." We spoke with Sabine Schmitt and Dieter Hierner, Heads of Startups@Germany - Bavaria Region, about Deutsche Bank's offerings for startups.
How exactly does Deutsche Bank work with startups and what support does it offer young founders?
Deutsche Bank supports startups from the very beginning and through all stages of development. Initially, the focus is primarily on consulting and initial payment products, such as accounts and cards. We firmly believe that young entrepreneurs should organize their finances early on so that they can grow quickly and this growth doesn't overwhelm them. This is even more true when they operate across borders and are supported by Deutsche Bank. Questions arise early on that we can help founders with, such as international payments, hedging supplier risks, building international business, or professionalizing finance functions.
Support for scaling
Scaling is a key issue in the digital economy. We can support this scaling because we understand the pitfalls and challenges of transitioning from startup to mid-sized company and from mid-sized company to corporation. When these transitions are successful, companies can realize their full potential for success.
Does Deutsche Bank also invest directly in startups? And if so, are there any Munich-based companies in which Deutsche Bank owns shares?
Fintech and insurtech companies as cooperation partners are an important part of our innovation strategy. This also includes evaluating the strategic investment potential of each partner in every collaboration. We already cooperate with a double-digit number of tech partners, with whom we have already brought many products to market maturity for our customers. We want to be the first point of contact for B2B collaborations among market-leading fintechs and insurtechs. However, if fintechs or insurtechs want direct access to the end customer, we view these companies as competitors and act accordingly. For example, we were one of the first cooperation partners (without participation) with Gini from Munich, which enables photo transfers via smartphone.
Deutsche Bank as a link between old and new economy
What other offers does Deutsche Bank have for startups?
We offer startups our network for potential collaborations – we can therefore act as a link between the old and new economy. We have a good insight into business models and technologies from both worlds. This allows us to derive hypotheses about which potential partners might work together effectively. But above all, it is important to create a protected space in which both sides can exchange ideas. We try to provide this space with workshop and conference formats. We create the space, but as a bank we do not presume to match pots and pans. As a bank, it is also important to have regional proximity to the networks of companies and startups. And we need to have a very good understanding of the content, which is why we have our own technology and sector experts on board.
Does the collaboration focus on startups in the fintech sector or does Deutsche Bank work with young companies across sectors?
We have various ways of collaborating with startups. First and foremost, we don't focus solely on fintechs; we also work with young companies whose offerings go beyond banking. We want to offer these value-added services to our customers as well. A collaboration can take various forms: On the one hand, we can leverage technologies, approaches, and value chains and make them accessible to our customers via our platform. In this case, we enter into a partnership with the providers to utilize their technologies and expertise. A so-called "referral transaction" is also possible, in which we refer customers to startups or fintechs, which can then offer their services. We also have the option of bringing the startups onto our own platform. We do this by connecting their products to our "banking world" via API interfaces, allowing our customers to easily use their services. In selected cases, we also acquire a stake in the company.
Deutsche Bank: Existing collaborations with Munich startups
We already have some investments. This allows us to participate in any potential value increase resulting from the additional business generated through our collaboration. We currently cooperate with around 20 startup companies – but we do not have a financial stake in all of them.
What are the success stories of working with Munich startups?
Many new startups are being founded in Bavaria, and especially in Munich. Two successful examples are Supernutural and HolodeckVR. Supernutural produces sustainable, indestructible nut grinders. These are not only found in organic stores or packaging-free supermarkets, but now also in hotels or at companies like 1. FC Bayern Munich, which are concerned with nutrition and want to offer their employees or guests a holistic concept.
The technology of Holodeck VR offers groups of up to 20 people – equipped with appropriate headsets – exciting virtual reality experiences. This allows amusement parks, festivals, or other public spaces such as shopping centers or hotels to invite their visitors to unique experiences. The origins of this globally patented technology date back to the Fraunhofer Institute for Integrated Circuits IIS, where the founders developed the idea and fundamentals of the product.
Our specialists advise these startups on banking services and solutions for every development phase of their companies and also make the bank's entire network available. We also appear together at events, connecting the startups with successful entrepreneurs and sparring partners. One example is the "Munich Entrepreneur Salon."
How to apply for a cooperation
How can startups apply to work with Deutsche Bank?
We're committed to the platform economy. This means we want to offer our customers the broadest possible access to excellent products via our platform. These products don't necessarily have to come from Deutsche Bank. The concept of "open banking" plays a central role in the platform economy. This means opening up our interfaces, which allows third-party providers to use customer data for external applications, similar to an app store. With the "Payment Service Directive II" (PSD II), the legislature has even required banks to take this step. But we're going one step further.
On the Deutsche Bank developer portal (https://developer.db.com/) you will find extensive information about PSD2 and our own API offering, which is already available to third-party providers independently of PSD2. All data queries regarding account information, as required by PSD2, can also be made via our so-called Premium APIs. We also offer APIs with a range of services that go beyond PSD2 – primarily customer information, credit card information, and securities accounts, but also customized data queries such as proof of age or income.
Our API program thus goes far beyond the requirements and fulfillment of PSD2. That's why we opened up to third parties much earlier and more comprehensively – as early as 2017, as the first major German bank. Our API program is the technical foundation for our platform business. The primary goal here is to attract new partners. However, we see great potential here, especially for online commerce and the B2B sector.
We also develop our premium APIs in close collaboration with existing and potential new partners. Therefore, we invite interested companies to contact us and share their requirements and ideas with us. We offer the opportunity to become part of our API Partner Networks We founded this to jointly evaluate the potential of bank data for each individual case and test it in pilot projects. This way, we ensure that our premium APIs don't simply deliver data, but solve very specific business problems. Today, a four-digit number of external developers are already developing new products and services for our customers using the dbAPI.
Assessment of Germany as a Fintech location
How do you assess Germany as a fintech location and what framework conditions are important to be able to compete internationally in the future?
Other countries are significantly further ahead than Germany. There are two reasons for this: First, information technology in Germany is not as advanced as in other countries. Second, Germany differs culturally and structurally from the US or Asia. Several factors contribute to this: In Germany, there is an oversupply of established financial service providers, which negatively impacts demand for fintechs. There is also a general risk aversion in society towards fintech services. And even if there is demand, the German-speaking market is often too small for fintechs to expand and go global.
To solve the first problem, the Scandinavian model of IT infrastructure investments is a good fit, as there are still regions in Germany where internet connections are extremely slow. The solution to the second problem is much more complicated, as it requires very long-term planning, such as early-stage IT training in schools. Due to these two aspects, fintechs in Germany are generally B2B-oriented and have a more business-oriented than a retail focus.
