Deutsche Bank AG DB is reportedly trying out artificial intelligence tools to detect likely indications of transgression from the voice tone of traders' telephonic conversations.
The Frankfurt-based financial behemoth is leveraging Google Cloud's machine learning to explore the potential uses of large language models, or generative AI, to assist clients, Bloomberg reported, citing Bernd Leukert, chief technology, data and innovation officer, in an interview.
The Bloomberg report noted that currently Deutsche Bank's surveillance tools can analyze words but not tone changes or hints of cynicism.
Read More: Deutsche Bank Fined For Money Laundering Control Failures: Federal Reserve Slaps Penalty Of $186M
"If you have a tool that can understand and direct you to tonality, not just to words that are suspect, it can give much better oversight," Leukert told Bloomberg. "It has the potential to put governance onto a completely different level," he added.
Deutsche Bank is using recordings of trader calls to train the AI, Bloomberg mentioned. This helps the software understand their language and conversation patterns. The AI will guide analysts to points of interest.
The report also noted that the company is on a hiring spree and plans to add more to its base of 16,000 staff working on tech, data, and innovation (half of whom are engineers working on code).
Yet, some attorneys caution about the potential pitfalls of employing AI to identify misconduct.
A financial services partner at Fieldfisher LLP in London stated that if the software focuses on laughter or unusually profitable trades, it might overlook more serious issues.
There's also a chance of traders reasoning that flaws in the software created the evidence against them, and they were not at fault.
Earlier this year, Deutsche Bank paid $75 million to settle a lawsuit brought by women who claimed they were abused by the late financier Jeffrey Epstein, accusing the bank of facilitating his sex trafficking.
During its Q2 results, Deutsche Bank said it will target incremental operational efficiencies of €2.5 billion annually by 2025.
By the end of H1 2023, the company achieved around €1 billion in efficiencies. It also reiterated its plan to reduce €15 billion-€20 billion risk-weighted assets in lower yield portfolios by 2025.
Price Action: DB shares are trading higher by 0.76% to $10.65 premarket on the last check Wednesday.
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