On Wednesday, Germany’s biggest bank, Deutsche Bank, shared that it has found a bug in its decade old software that it has using for flagging suspicious transactions. This news came out just a day ahead of the bank’s annual shareholders meeting held on May 23.
According to a Deutsche Bank spokesman the faulty software was one of the many anti-financial crime systems that the bank uses. The glitch happened because two of 121 parameters in the software were not defined accurately. It was detected when employees from the bank’s anti-financial crime unit started working on improving the bank’s internal processes last year. In a statement the bank said, “Deutsche Bank is working on correcting the error as quickly as possible and is in close contact with the regulators.”
This news has further dealt a major blow to the bank’s reputation as it is already facing several accusations regarding its involvement in money laundering. On Tuesday, The New York Times reported that during 2016-2017, the bank’s executives were informed by its anti-laundering-specialists about several suspicious transactions. These transactions, which also involved Donald J. Trump and his son-in-law, Jared Kushner, were first flagged by a computer system.
Despite these reports, the bank refused to take any action. “Compliance staff members who then reviewed the transactions prepared so-called suspicious activity reports that they believed should be sent to a unit of the Treasury Department that polices financial crimes. But executives at Deutsche Bank, which has lent billions of dollars to the Trump and Kushner companies, rejected their employees’ advice,” wrote The New York Times in its report.
Following these news, the bank’s share price reached a new record low on Thursday morning and needless to say, this left its shareholders unimpressed. At the bank’s Annual General Meeting, Christian Sewing, the Deutsche Bank chief executive, faced discontent of the shareholders regarding the bank’s top management. He has now promised to improve the bank’s internal controls and is planning to “make tough cutbacks” to reverse the damages.
Addressing the investors, Sewing said, “We will accelerate transformation by rigorously focusing our bank on profitable and growing businesses which are particularly relevant to our clients.”
Read the full story on The New York Times.