Derlin highlighted the transformative journey undertaken by Deutsche Bank’s international private bank in Luxembourg, emphasising the company’s focus on building client relationships and serving ultra-high-net worth individuals, family offices, and entrepreneurs.
Reflecting on the bank’s strategic shift, Derlin said: “There was a refocusing of the strategy to have a much more balanced approach, with more weight on trust-based, long-term client business that you commonly see in wealth management, and less leverage and exposure on the more sales and trading type of activities, which dominated the banking industry in the earlier part of the century.”
To drive growth and increase market share, Deutsche Bank has been expanding into new markets. “We have expanded our market coverage into areas where we saw growth potential. Although we cover pretty much all of Europe, there were areas in which we wanted to increase our market share.”
The bank plans to hire around 250 relationship managers within its international private bank business to support its growth strategy. “By recruiting more talent, we have established greater firepower and focus on serving that space,” Derlin said.
The change in client base necessitated a corresponding change in client offerings. Derlin emphasised the bank’s investment in enhancing services and solutions for clients, particularly in structured financing. “Luxembourg is a centre of excellence when it comes to structured financing. So, clearly that's the space in which we're further invested.”
Derlin’s journey in finance started at McKinsey as a consultant in the financial services sector. In 2004, he moved to Deutsche Bank’s London office, where he worked in various leadership positions. He also spent five years in Hong Kong overseeing the bank’s business in the Asia-Pacific region. After returning to London, Derlin was offered the opportunity to head Deutsche Bank’s international private bank in Luxembourg.
Derlin and his wife, a former professional dancer and fitness trainer, have three children. Like many newcomers to Luxembourg, they were unsure what to expect upon arrival. Derlin said his family have embraced life in Luxembourg since moving. “It's a place that really delivers a lot in terms of quality of life, safety, and the ability to be part of a community. It’s something you can only really experience once you live here in person”.
This used to be a 60-plus white, male dominated environment. Increasingly more female clients are coming into the picture.
One ESG product per category
Deutsche Bank Luxembourg was established in 1970 as a subsidiary of Deutsche Bank and today employs 320 staff. The Luxembourg entity provides support to clients and teams both in Europe and further afield. It is particularly active in the Environmental, Social and Governance (ESG) space. Derlin wants ESG to form part of the bank’s core investment strategy. “We expanded our value proposition for our clients, including a flagship ESG strategic asset allocation and at least one ESG product per product category.”
Derlin said the bank had also invested heavily in upgrading its processes to meet stringent regulatory requirements for onboarding and KYC. “Process improvements and investing in automation enables us to do more with less, which for example supported our ability to onboard 50% more clients this year than in the same period the year before.”
Derlin observed that more women were becoming active in the industry and saw this as a positive step towards a more diverse workforce. “This used to be a 60-plus white, male dominated environment. Increasingly more female clients are coming into the picture.” Derlin said, adding that just short of 15% of industry clients are women and this trend is continuously evolving.
Demographic changes mean there is also a significant generational wealth transfer, according to Derlin. “We want to support clients transition from their current situation to one in which their children will be beneficiaries in varying capacities, depending on their specific situation.”
Clients still value personal experiences
Clients are also becoming more sophisticated and firms like Deutsche Bank are trying to adapt to their needs. Derlin said clients today have access to real-time information on financial markets via social media and were better informed about market trends than in the past. Managers and solution specialists, therefore, need to be much more prepared to add value than 20 to 30 years ago, he said.
Derlin believes that while banks need to cater to a younger demographic by providing digital experiences, many clients still valued personal relationships. “If you read the newspapers, it sounds like everybody wants to go digital, but in wealth management our real-life experience is still quite far from that.”
Nevertheless, he views digitalisation as an enabler that compliments the overall client engagement experience. “Digitalisation is a means of delivering basic services to clients in a fast, accessible, easy, and affordable way. For more sophisticated solutions, a personal experience will remain central.”
This article was published for the Delano Finance newsletter, the weekly source for financial news in Luxembourg. .