If you're looking for a job at Deutsche Bank in the wake of last week's fourth quarter results, there is one area you might want to focus on: the so-called 'control functions.' In the presentation accompanying its results announcement, Deutsche said that headcount across its control functions increased 43% in the past two years to 5,700 people. However, it also implied that some of the jobs in its control functions pay a lot more than others.
Deutsche Bank defines its control functions as: anti-financial crime, know your client in the corporate and investment bank, compliance, audit, and 'non financial risk management.'
If you're one of 230 senior employees in Deutsche's control functions who's also senior enough to be a material risk taker (MRT) you can expect to earn very good money. In 2017, Deutsche paid its control function MRTs an average of €530k ($606k) each. However, last week's figures suggest (predictably) that the other 5,470 (or so) people earn a lot less than this.
How much less? As shown in the charts below, taken from Deutsche's presentation, the bank spent a total €1bn on employees and technology in its control function last year. This amounted to an average of €175k per head, and it's fair to assume that paying people only accounted for a fraction of that.
In combination, the charts also reflect which areas of the DB control function employ a lot of staff but are comparatively cheap to run, and which areas employer fewer staff but are more costly to run. For example, the bulk of Deutsche's swollen control staff are to be found in the CIB's know your client team. Here, headcount increased dramatically as a proportion of the total even though costs since 2017 have remained comparatively stable.
It's hard not to conclude that KYC jobs at Deutsche Bank are the most poorly paid in the control club, and that Deutsche has been massaging KYC pay ever lower the more people it hires. By comparison, spending per head on areas like audit especially appears to have risen in the past two years.
The increase in control function jobs at Deutsche Bank may not last. In 2017, former CEO John Cryan famously said that robots could replace half Deutsche's employees, particularly its accountants and auditors (whom Cryan said were spending a lot of time being like an abacus). In last week's presentation, Deutsche said it was spending heavily on technology to update its control functions, with €700m invested in technology relating to cyber security, anti-financial crime and compliance in the previous three years.
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