European banks BNP Paribas and Deutsche Bank plan to pull back on expenses this year as they lean into their tech investments.

“We are maintaining our cost discipline,” Deutsche Bank Chief Executive Christian Sewing said during the $578 billion bank’s first-quarter earnings call April 25. “2023 marked the peak of our investments, but we continue to invest to reduce the complexity of our organization through improving technology, processes and control capabilities.”

Similarly, $2.6 trillion BNP is “accelerating and enlarging” its operational efficiency through automation, robotization and digitalization in 2024, Chief Financial Officer Lars Machenil said during the bank’s April 26 earnings call.

In 2024, BNP Paribas’ savings will reach 1 billion euros ($1.1 billion), bringing the bank’s recurring savings to $2.9 billion, Machenil said during the call.

Deutsche Bank aims to maintain a quarterly run rate of $5.4 billion in 2024, according to the bank’s earnings release. By the end of the year, the bank expects total noninterest expense to clock in at around $21.4 billion, down from $23.3 billion in 2023.

Tech investment

As the banks look to boost savings, their investment in technology is expected to start paying off.

Deutsche expects to benefit from its ongoing tech investments, including:

• Upgrades to technology infrastructure;
• Front-to-back redesign of processes to boost efficiency; and
• Optimization of its overall platform.

BNP is looking to its investments in the cloud and AI to optimize bank processes, Machenil said.

BNP has 300 AI use cases in the pipeline and aims to generate $541 million of value via AI through 2025, Chief Executive Jean-Laurent Bonnafe said during the bank’s fourth-quarter earnings call in February.

Editor’s note: All amounts have been converted to U.S. dollars. 

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