If you’re a Deutsche Bank client, there’s more bad news in store than the already significant fact that it has run its equities department into ruin. Tech companies playing loosey-goosey with data privacy aren’t the only actors to worry about. The bank is now investigating a potential data breach owing to former employees having access to system and price data for weeks after they’d been laid off.
Deutsche Bank Negligence Might Have Led to Confidentiality Misconduct
Dropping the ball on proper exit procedures, Deutsche Bank failed to deactivate access to banking systems and emails for the first 50 of a planned total of 18,000 staff layoffs. Ex-employee traders in London and New York potentially had access to confidential client and price-sensitive data for weeks after they’d left the bank. One equity salesperson purportedly sent 450 emails from an address registered to her on the bank’s email client long after she’d been fired.
The bank has launched an investigation into whether the breach resulted in sensitive data being accessed, and whether this came about to collusion by former and current employees. According to Jeremy Kirk, head of Deutsche’s global compliance surveillance has said that nearly all outgoing emails sent during this time had been reviewed. So far, there’s been no indication of a data violation, and Kirk confirmed that all access has been revoked.
A banking insider told Financial Times:
“A lot of the decisions seem to have been made on the hoof, things haven’t been thought through properly, which is causing a huge compliance headache. We should have been more aware ahead of time and brought in more tech people to cope.”
Who is Deutsche Bank?
149-year-old Deutsche Bank, founded in 1870, is a critical player in the global banking arena. As the world’s 15th largest bank by total assets and Germany’s largest banking institution, it holds branches in 58 countries. A so-named universal bank, it offers private and commercial banking, corporate and investment banking, and asset management. A one-stop shop where clients can go all-in on having their banking partner act as custodian of their money, their assets, and their data.
Most banks have a few PR crises and economic meltdowns on their resumes, and Deutsche is no exception.
It crashed, burned, then phoenixed its way out of the Great Depression in 1933. It supported Hitler and funded Auswitchz during World War II. Decades later, the bank was implicated as a significant driver of collateralized debt obligation that led to the 2007-09 subprime mortgage crisis in the USA and contributed to the 2007-08 financial crisis that had ripple effects across the world. The same market crash, incidentally, that led Satoshi Nakamoto to create Bitcoin as an alternative to the banking catastrophe. They’ve been fined over allegations of an estimated $80 billion worth of Russian money laundering and for rigging interest rates. The bank has even been subpoenaed in a probe into United States President Donald Trump’s finances.
In short, you name it, Deutsche is entangled in it. Trump’s recent tweet suggested cryptocurrencies are the source of all that is criminal and seedy. In the financial world, a crime committed by a bank is merely cause for a fine.
The Beginning of the End or Another Close Call?
Last month, the bank announced that it would be exiting the stock market game by quitting the global equities trading business. The news sent the markets reeling, and shares fell by as much as 5.2%. Deutsche expects to restructure to regain profitability by severing a total of 18,000 jobs by 2022.
Insiders say hedge funds have been pulling as much as $1 billion per day since the announcement on July 7. This comes after Deutsche announced a $3.5 billion loss in 2019 Q2, the worst quarter the company has had since the 2008 market crash.
Trustlessness in a World Where No One Deserves Trust
Our data is out of our hands. Our money, in the hands of financial institutions in peril both financially and administratively, evidently just as much. We’ve been at the mercy of apex predators who do not have our best interests or privacy at heart. Cryptocurrencies have opened the door to a new world, one in which both our money and our data are within our control. Inch by inch, the world is reaching a conical point where a demand for decentralized trustlessness will replace our trust in a financial or any other institution’s good-enough. Cryptocurrencies are waiting ever so patiently.
By Nadja Bester