HP (HPQ) to Become Wholesale Banking IT Infra Partner For Deutsche Bank AG (USA) (DB)

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Hewlett-Packard Company (NYSE:HPQ) had exciting news for its investors on Tuesday. In an unprecedented move, Hewlett-Packard Company which is known more as the maker of laptops and PC surprised many by choosing to be an outsourcing partner.

Outsourcing Partner for Deutsche Bank AG

Hewlett-Packard Company’s new multibillion dollar deal with Deutsche Bank AG (USA) (NYSE:DB) will run for a decade and will earn the ex-hardware maker billions.

Meanwhile, Deutsche Bank announced that it will outsource majority of its wholesale ‘banking IT infrastructure’ to Hewlett-Packard Company (NYSE:HPQ). Deutsche Bank will however retain complete control of the retail operations, the bank noted.
Hewlett-Packard Company over the next 10 –years will ensure that all of the computing capacity which Deutsche Bank AG (USA) (NYSE:DB) needs is met. It will also offer data storage besides hosting the bank’s operations.

Additionally, the joint statement by Hewlett-Packard Company and Deutsche Bank noted that the bank will retail control over its information security as well as the IT architecture.

Highlighting the need for a specialized outsourcing partner to handle the various IT operations of its whole sale banking segment, Chief Operating Officer of Deutsche Bank AG, Henry Ritchotte, noted that, operation costs could now be sustained by the move.

Additionally, it would allow the bank, the band-width to work on its core capabilities, which is banking and launch newer product, and services. Moreover, Henry Ritchotte noted, there would improvement in the timelines by which newer products would be launched.

For Deutsche Bank AG (USA) (NYSE:DB), the outsourcing partnership is not for the first time. The bank has since 2003, worked with IBM to manage its German retail banking operations. IBM was also involved in running branch network, which are run as Postbank, in Germany.

Hewlett-Packard Company (NYSE:HPQ) is only a cog in the larger picture of restructuring that Deutsche Bank has begun since November last. As the bank continued to fall short of its profit targets, it sought the restructuring route, even hiving-off Postbank, as a possible option. Outsourcing wholesale banking is expected to bring in valued-added growth for the bank!