Deutsche Bank Takes Stake In Open Banking FinTech

Deutsche Bank Takes Stake In Open Banking FinTech

Deutsche Bank has acquired a 4.9 percent stake in the German-based FinTech Deposit Solutions, according to a Deutsche Bank press release on Thursday (Sept. 19).

Deposit Solutions provides open banking technology that allows more than 100 banks across 18 countries to offer their customers products from third-party banks.

Deutsche Bank has had a relationship with Deposit Solutions since 2017 with a savings product called ZinsMarkt. The service allows users to access fixed-term deposit products from third-party banks that pay higher interest.

ZinsMarkt has already processed about €2 billion ($2.2 billion) in deposits and has over 23 fixed-term deposit products with varying maturities from three banks.

“We have been investing in our capabilities to operate as a digital platform for a considerable length of time,” Karl von Rohr, president of Deutsche Bank, said in the release. “In the digital age, the only players that will maintain client contact are those who can offer the best products, even if they are provided by third-party vendors.”

Deutsche Bank joins almost 100 financial institutions from 18 countries using the Deposit Solutions platform. Deposit Solutions expanded into Switzerland earlier this year, its first market outside of Europe. It is also planning a launch in the U.S. in the coming months.

Deposit Solutions is now Germany’s second-largest FinTech unicorn, CNBC reported, with a valuation exceeding €1 billion ($1.1 billion).

Deutsche Bank’s acquisition of Deposit Solutions comes on the heels of a restructuring that led to 1,800 layoffs and the breakdown of partnership discussions with competitor Commerzbank.

A combination of the two German banks via a merger has been under discussion since 2016, before either was forced to restructure. With the health of Deutsche Bank ailing, the German government had urged the two companies to merge. In a statement on its website, Commerzbank said the two sides discontinued talks about a combination after careful analysis determined it would not be in the interest of either bank’s shareholders. Had a deal happened, it would have been the third-biggest bank in Europe with $2.04 trillion in assets.