Deutsche Bank is a leading European Corporate Bank headquartered in Frankfurt, Germany, with a global network spanning 58 countries. Its core business areas are investment banking, private banking, wealth and asset management.
Deutsche Bank uses a three-tiered governance framework to guide its decision-making process on new clients and transactions perceived to pose a reputational risk to the bank. Two years ago, the bank started using SIGWATCH as part of this process,
to understand the risks that could cause reputational damage.
SOLUTION AT A GLANCE
Deutsche Bank relies on SIGWATCH data to monitor the issues and emerging trends NGOs are campaigning on. If an issue gains momentum in any of the sectors it operates in, that acts as a cue for Deutsche Bank to check that it has the right controls and due diligence processes in place to mitigate the risk.
Rupert Erasmus, Deutsche Bank’s Head of Reputational Risk, explains, “We have standard controls for all transactions and client relationships. However, sometimes as a result of what we see in SIGWATCH, we’ll ask; do we need to be doing anything more, given the attention these issues are getting from NGOs?”
SOLUTION IN ACTION
SIGWATCH enables Deutsche Bank’s Reputational Risk team to gain a better understanding of a wide range of topical issues, from e-cigarettes to cryptocurrencies. Armed with this intelligence, Deutsche Bank can ascertain potential reputational risks and assess whether it should be doing business in a particular sector or with a particular company, which could be a new prospect or an existing client.
Last year, for example, Deutsche Bank used SIGWATCH to monitor supply chain and retailer issues exacerbated by the pandemic. Deutsche Bank was not only able to see NGO campaigning on the topic unfold and intensify, but it was also able to drill down and identify the companies being attacked for bad practice, allowing it to assess the implications for its own business.
Rupert says that if certain companies are being targeted by NGOs on trending topics, his team will first check if they are a Deutsche Bank client. If they are, the team will approach the internal business contacts for those clients to discuss if additional action is needed to mitigate potential reputational risk.
Rupert says SIGWATCH supports the complexities of the Reputational Risk team’s work by highlighting risks that could negatively impact the Deutsche Bank brand.
“Reputational risk isn’t binary. It is easy for the business and deal teams to look at regulations and see whether something is legal or not. Understanding reputational risk and the bank’s risk appetite is much harder and more nuanced.
SIGWATCH helps us to translate broad negative attention on companies and issues into a dialogue that the risk functions can start with the business.”
Clear, easy-to-use intelligence
According to Rupert, SIGWATCH’s other important strength is clarity. “With sources such as the media, sifting through all the relevant articles and working out what it means can be challenging. With SIGWATCH, getting to the heart of an issue is refreshingly straightforward.
“We’re using NGO criticism almost as a proxy for public perception. Logging into the SIGWATCH system and seeing a neat bar chart of the most criticised companies overall or in a sector is superb.”
SIGWATCH also acts as an indicator of issues that could pose a reputational risk to the bank in the future. “NGOs do very thorough work and a topic they’re looking at now could well be an issue further down the line.”
This enables the bank to stay ahead of trending and emerging issues. Rupert explains, “It’s a bit too late when NGOs are knocking at our door and telling us that they’re naming us in a report. “SIGWATCH gives us a full picture of what NGOs are saying about us, our competitors and other sectors in order for us to take a proactive approach and look at issues upfront.”