Agenda Customer-Centricity is a Challenge for Banks Key Aspects of Design Thinking in a Corporate Context Embedding Design Thinking In Deutsche Bank’s IT Division The Evolution of Design Thinking Within Deutsche Bank Design Thinking Outcomes at Deutsche Bank Lessons Learned

Customer-Centricity is a Challenge for Banks Banks need to develop a deep understanding of customers’ needs This raises the question as to when banks should involve their customers in the development of new products and services. Customers receive very attractive financial services offerings from new, non-traditional, players. In fact, over 50% of the innovations in the financial sector are being made by non-traditional institutions. This means that banks’ traditional development and innovation processes have to compete with the research and development environments of non-banks. To respond to these challenges, traditional banking institutions clearly have to get better at innovation.

Agenda Customer-Centricity is a Challenge for Banks Key Aspects of Design Thinking in a Corporate Context Embedding Design Thinking In Deutsche Bank’s IT Division The Evolution of Design Thinking Within Deutsche Bank Design Thinking Outcomes at Deutsche Bank Lessons Learned

Key Aspects of Design Thinking Design thinking is a well-tested approach that enables organizations to see the world through the eyes of their customers Customer-centricity involves a systematic and iterative discovery of customer needs (which may be latent). A key aspect of customer-centricity is that end customers are continuously integrated into the organization’s innovation process.

Key Aspects of Design Thinking

Key Aspects of Design Thinking Milestone Description Design Space Exploration (ongoing) The problem design space is explored (concurrently with the following milestones) Critical Functions Critical functions are extracted from the problem space that need to be integrated in the ultimate solution Dark Horse (visionary) Previous assumptions are challenged to explore unlikely-to-succeed ideas, knowing that if they succeed the performance payoff will be relatively large Funky (integrated) The most successful elements from the previous milestones are connected; this milestone includes roughly connected concepts Functional The first concrete preview of the ultimate solution that integrates working functionalities is developed X-is Finished One key functionality, “x,” is completed Final Prototype The final prototype includes the solution for one/several key identified needs and delivers the experience of using the real product (even before development starts)

Agenda Customer-Centricity is a Challenge for Banks Key Aspects of Design Thinking in a Corporate Context Embedding Design Thinking In Deutsche Bank’s IT Division The Evolution of Design Thinking Within Deutsche Bank Design Thinking Outcomes at Deutsche Bank Lessons Learned

Deutsche Bank’s IT Division Founded in 1870 in Berlin, it is the largest bank in Germany and the largest currency dealer worldwide. The Group, Technology & Operations (GTO) division is the bank’s “DNA.” GTO provides the processes, systems, data and Infrastructure needed for running the bank GTO has about 24,000 employees, representing over 20% of Deutsche Bank’s total full-time-equivalents (the bank has about 100,000 employees worldwide). As of 2013.

Embedding Design Thinking How the IT division could supply products and services to the business without having any idea of what end customers really wanted? How the solutions it provides are actually deployed? To enable customer proximity and the alignment of IT and business, end customers must be involved directly at the intersection of business and IT. CIO agreed that end customers’ perspectives should have more influence on the business to enable it to deliver customer-centric innovations.

Agenda Customer-Centricity is a Challenge for Banks Key Aspects of Design Thinking in a Corporate Context Embedding Design Thinking In Deutsche Bank’s IT Division The Evolution of Design Thinking Within Deutsche Bank Design Thinking Outcomes at Deutsche Bank Lessons Learned

The Evolution of Design Thinking Within Deutsche Bank Dimension Evolution Summary Phase 1: Learning (year 1-2) Phase 2: Adapting (year 3) Phase 3: Diffusing (year 4 onwards) Organizational Structure Strength of connectivity between DT project structures and organizational structures Weak—isolated from other initiatives Stronger—simplifying DT elements for use and company projects Strong—core management of all DT projects Project staffing of the DT team Externally hired interns Externally hired interns mixed with internal staff Mixed team: externally hired interns; externally hired interns with internal staff; internal staff Developing Customer Proximity Mindset Employee design thinking capabilities Key tools and interdependencies of tools Understanding of holistic customer-centric innovation approach Development of skillset for future work Understanding of customer integration Singular exchange points Institutionalized in DT projects Institutionalized beyond DT projects Focus of DT Business-IT alignment Fostering customer-centricity and understanding customers Application beyond DT projects

The Evolution of Design Thinking Within Deutsche Bank Dimension Evolution Summary Phase 1: Learning (year 1-2) Phase 2: Adapting (year 3) Phase 3: Diffusing (year 4 onwards) Evolution Triggers Triggers for each phase Visibility of tangible project milestones and their outcomes Strong sponsorship from strategic level Externally coached learning for quick internal learning Speed of development Simplifying DT project structure for different project needs Transfer of DT staff to development staff (especially after DT projects) Systematically managed and taught innovation community Visibility of DT as methodology and innovation hub Standardization of DT toolbox DT principles taught at executive level, operational level, IT division and business division Projects See descriptions in the boxes E.g., Financial timeline (2009) E.g., Accessing stored documents (2011) E.g., Attracting new brokerage clients (2013)

Role Interdependencies Bridgehead - Responsible for the internal strategic evolution of DT and for connecting the DT teams with the organization and vice versa. Sponsor - Representing top management, defining the challenge and assigning professional coaches to the DT teams. Professional Coaches - Providing specific know-how and expertise to DT teams. DT Team - Applying the DT methodology Innovation Community - Not formally assigned to DT projects, but showing interest in DT activities. Method Coaches - Responsible for educating Deutsche Bank staff in the DT methodology and communicating method-related issues. Researchers - Identifying findings from DT projects and reintegrating the findings in future projects.

Agenda Customer-Centricity is a Challenge for Banks Key Aspects of Design Thinking in a Corporate Context Embedding Design Thinking In Deutsche Bank’s IT Division The Evolution of Design Thinking Within Deutsche Bank Design Thinking Outcomes at Deutsche Bank Lessons Learned

Design Thinking Outcomes at Deutsche Bank Phase 1: Learning DT was mostly observed by members of the innovation community. As they saw results, they started to adapt and practice their own ways of using the DT approach, step by step. Phase 2: Adapting Diffuse practices into the work culture, spreading awareness of customer-centric solutions. Phase 3: Diffusing 150 members from all divisions who regularly attend presentations and have built a knowledge- and experience-exchange community. DT teams located in the IT division had direct contact with the bank’s potential end customers, which enhanced their understanding of customers and increased customer involvement.

Agenda Customer-Centricity is a Challenge for Banks Key Aspects of Design Thinking in a Corporate Context Embedding Design Thinking In Deutsche Bank’s IT Division The Evolution of Design Thinking Within Deutsche Bank Design Thinking Outcomes at Deutsche Bank Lessons Learned

Lessons Learned Create an Enabling Organizational Structure Provide Design Thinking Education Strategically Position Design Thinking Team Members Use Prototyping as a Key Tool Take an Evolutionary Approach to Building a Design Thinking Culture