Deutsche Bank has added two new high-level executives to oversee information technology, as the bank moves to strengthen IT compliance and regulatory reporting in the wake of regulatory scrutiny.
Richard Shannon, a 20-year veteran of Goldman Sachs, will assume the role of the Americas chief information officer in October. He will also serve as the Americas co-head of group technology and operations alongside Scott Simon who is currently regional head of that unit. Most recently, Shannon was global head of Web platforms technology at Goldman Sachs.
In addition, Scott Marcar will also join Deutsche Bank in October as head of its information technology infrastructure. Marcar was previously CIO for corporate and investment banking at Royal Bank of Scotland.
The hires are part of an effort by Deutsche Bank to better manage weaknesses in regulatory reporting that were identified by the Federal Reserve Bank of New York, the Financial Times reports.
The Wall Street Journal reports that Deutsche bank had entered into a memorandum of understanding with the Federal Reserve Bank of New York and New York's Department of Financial Services back in 2012 in which it pledged to overhaul technology and compliance to fix what regulators described as serious risk management deficiencies.
According to the Financial Times article, Deutsche Bank received a further letter from the Fed in December warning that its reporting structure is "low quality, inaccurate and unreliable." The New York Fed is particularly concerned about whether Deutsche Bank will be able to correct its reporting problems by 2015, when all large foreign banks in the U.S. must demonstrate that they are prepared to comply with new stricter rules for foreign banks.
Deutsche Bank has reportedly invested 1 billion euros in the issue, hired 500 employees to work in systems and controls in the U.S. and doubled its IT compliance budget.
"Over the next year, our local management team will be very focused on building our capabilities across all critical infrastructure areas to best support our growing US franchise," says Jacques Brand, CEO of Deutsche Bank North America, in announcing Shannon's hiring.