Deutsche Bank GCC adopts start-up model for AI incubator

The workforce at DIPL (Deutsche India Pvt Ltd) the global capability centre of Deutsche Bank is more enthused about the prospect of change that new technology like AI will bring about. Stefan Schaffer, MD & CEO of DIPL attributes this to the association of change with positivity thanks to developments like UPI. The institution’s in-house incubator has recived 100 ideas within the first 100 days. In an interview with TOI Schaffer shares his view on how the India centre is strategizing and responding to change.


Could you outline your current roles, including your responsibilities with the GCC in India?
I hold three distinct roles. First, I serve as the CIO of Corporate and Shared Functions, managing IT for HR, procurement, legal, the chairman, and shared enterprise capabilities like document management and workflow systems. In this capacity, I report to the Deutsche Bank board member responsible for IT. Second, I am the CEO of Deutsche India, the legal entity known as the GCC. Third, I oversee all of Deutsche Bank's engineering-focused tech centers. These include two locations in India (Pune and Bangalore), Bucharest in Romania, Cary in the US, and Berlin in Germany. Specifically in India, we have teams in Pune, Bangalore, Jaipur, and Mumbai, handling both technology and operations.

Does this dual structure increase the responsiveness of the operations in India?
Yes, conceptually, it is crucial that local heads hold functional roles that are deeply embedded in critical areas of the bank. We want these centers to operate as an integral part of Deutsche Bank rather than remote offshoring hubs. They are Deutsche Bank locations that simply happen to be in India. Additionally, the workforce in India brings a refreshing openness to change. For many here in their 30s and 40s, change has historically led to positive developments, such as the rapid adoption of UPI. This adaptability greatly benefits our 150-year-old bank.

Does a limited physical presence in India increase the distance from customers, and how does that impact responsiveness?
We have over 20,000 employees in India, making it a highly significant part of the bank. Distance involves several layers: physical proximity, time zones, and language or culture. Physically, even if these roles were based in Germany, teams wouldn't necessarily sit in the same office as the customer. Time zone-wise, there is a substantial overlap between India and Europe. Furthermore, internal communication between IT and operations located in India is sometimes more seamless than it would be between distributed teams in Germany. Ultimately, our client base is international, and our teams here are well-equipped to support them.

Two years ago, the focus was on India becoming a center of excellence. What has changed since then, and have there been further investments?
We have grown, but our strategy has evolved from being purely growth-driven to focusing on decision-making and ownership. Previously, our IT structure consisted of 30% internal staff and 70% external personnel, with 30% engineers and 70% non-engineers. We successfully flipped that to 70% internal, 30% external, and 70% engineers. Currently, 70% of our tech personnel are located in our engineering centers. Our new four-year strategy shifts from "70-70-70" to "70-50-30". We aim to keep 70% of engineers internal and in tech centers, but now we want 50% of our portfolio owners and 30% of our senior leadership (CIO minus ones) based in these tech centers. The goal is to ensure our teams have true ownership and understand the banking process end-to-end.

Regarding the external workforce, such as service providers, will their numbers increase or decrease in the future?
We have reached our target state of a 70% internal and 30% external mix. This balance allows our internal teams to take ownership of intellectual property while utilizing external partners for specialized knowledge or to manage peak demand periods. We are comfortable with this ratio and have no plans to change it.

With AI being a major focus in banking, are these initiatives still in the pilot stage, or have they become mainstream?
We view AI as a significant driver of change and are actively embracing it through both top-down programs and bottom-up employee engagement. In India, we launched the "AI Forward" program with three core pillars. First, we implemented a massive training initiative on large language models, training 20,000 people on fundamentals and safe usage. Second, our "Catalyst" pillar embeds experts into teams to build prototypes in their daily work environments. Third, we established an incubator where any employee can pitch ideas to leadership for advice, context, and refinement. We received 100 ideas within the first 100 days. Concurrently, enterprise divisions are executing large-scale, agentic AI projects integrated into our standard book of work.

Are the employees pitching AI ideas utilizing a sandbox environment for their innovations?
Yes, we provide sandbox environments through our tech centers. For example, employees can utilize "DB Lumina," our internal instance of Google Gemini, to safely automate document creation or other tasks.

Are these innovations primarily at the individual level, or are enterprise-level projects also being driven from these locations?
Enterprise-level projects are executed as part of our global book of work. Because we are organized divisionally and globally, projects are not restricted to a single location; they typically span two or more centers. We deliberately avoid labeling initiatives as localized products to foster collaboration rather than competition between our global hubs.

Can you share examples of specific products or solutions that have originated from the teams in India?
Certainly. One notable innovation is an AI-driven Customer Relationship Management tool designed to proactively provide recommendations to our sales teams. Another is "DBTextract," a tool built on Google technology that processes massive volumes of unstructured documents. It is used to mass-extract data from forms and invoices, and it allows users to query thousands of documents simultaneously—such as identifying contracts with specific risk clauses. Both of these solutions grew organically out of our teams in India.

Given your background in ERP, how do you foresee the next phase of business transformation unfolding with AI?
I believe core backbone platforms that structure enterprise data will remain critical. Instead of declining in value, these systems are essential enablers. What will change is how we manage the "last mile" of configuration. Rather than executing complex, hardcoded customizations, we will increasingly use highly productive AI tools for development. Strong platforms are necessary to provide the structural accountability required by regulators, while AI will provide the flexibility around that core.

Will there continue to be a need for a "human in the loop" as AI advances?
Currently, society demands a human in the loop primarily for accountability, as we do not yet fully master these machines. However, human decision-making is not flawless; tasks like approving massive financial transactions provide very little contextual data, making humans uncomfortable. Machines are likely better suited for these evaluations. Just as society eventually accepted providing credit card numbers online and will likely accept self-driving cars, acceptance of autonomous AI systems will shift once they prove significantly safer and more reliable than human operators.

How are current geopolitical events affecting the location strategies for banking services?
While companies are generally more conscious of where operations occur, geopolitics has not massively altered our location strategy. As a regulated entity, we naturally manage scenarios to ensure resilience if an environment changes, but our headcount growth follows a long-term plan rather than reacting to immediate geopolitical shifts.

Do global tariffs impact the bank's operational decisions?
Tariffs do not significantly affect our internal operational footprint. However, if our clients need to adjust their supply chains due to tariffs, we focus on assisting them with new trade financing or payment structures in those updated markets.

With the weakening of the rupee, does India become a more attractive destination for investments?
Currency fluctuations do not drive our operational strategy. We operate on long-term investment cycles rather than purchasing services because they momentarily become cheaper. While exchange rates impact the bank's overall P&L at a financial level, they are not a topic of discussion for our long-term operational planning.

Is there any final perspective you would like to share?
Since relocating to India last October, I have been deeply encouraged by the workforce's proactive mindset. Instead of resisting changes like the advent of AI, there is a strong awareness of the need to get ahead of the curve. This adaptability and positive attitude toward the future are massive strengths as the country navigates a rapidly evolving global landscape.



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