Our bank management project „Fitt“ aims to modernize and future-proof the core of the bank – management in the areas of accounting, regulatory reporting, and risk control – by 2026. A key goal is to continue meeting regulatory requirements, particularly BCBS 239. Additionally, we are increasing efficiency in our processes, and it is essential for us to quickly and reliably access data for management decisions.

The speed at which our executives and the board members receive reliable figures to derive insights for decisions is crucial for the bank's operational management, independent of regulatory requirements. „Fitt“ will make us even better in this regard. The project is not only extensive, but also fundamental to Nord/LB’s future.

Since April 2024, Christoph Auerbach has been the Chief Operating Officer (COO) of Nord/LB. The 47-year-old from Mainz worked for HypoVereinsbank for nearly nine years before moving to Hanover.

For projects of this magnitude, close coordination with the board committees is crucial even before the start. After all, both in terms of content and investment volume, a lot is at stake. However, we not only report regularly to the supervisory board and stakeholders, but also review the project weekly as an executive board in the steering committee. This is essential for a project like this, in which over 250 people from the bank and external partners are working full-time.

We are on schedule and within budget regarding „Fitt“. Just over a year after the project launch, we reported the previously agreed interim goals and metrics to our stakeholders at the end of last year – and we fully met them. This shows that we are on the right track.

Our primary goal is to increase Nord/LB’s profitability, not its size. Accordingly, the modernisation of our bank management system is not linked to the bank’s future size.

Of course, we are implementing this project in collaboration with the ECB and continuously report on its progress. „Fitt“ also complies with BCBS 239 regulations, which is an area of great focus for banking supervision.

It is certainly the largest current programme at our bank.

I hope you understand that we cannot disclose exact figures. However, it is correct that the investments for a program of this scale are in the triple-digit million-euro range. The program is divided into three phases. We are currently in the first phase, which we will complete with a go-live in 2026. This phase will transition key processes in finance and risk control to a modern data framework and IT architecture.

We aim to fully implement the „Fitt“ program by the end of this decade. But, as mentioned, we will achieve a significant milestone in 2026.

Last year, an external auditor determined on behalf of the stakeholders that separating BLSK is theoretically possible. However, such a separation would be costly and subject to conditions, such as ensuring that neither Nord/LB nor BLSK suffers economic harm. Additionally, managing a separation alongside „Fitt“ would not be realistically feasible. Therefore, modernising our bank management system takes priority in the coming years.

Experience in the banking industry shows that large-scale bank management projects do not always succeed without issues. The complexity, scale, and numerous interdependencies make transitioning from legacy systems a challenging process. At no stage can we afford to be complacent. That’s why we are intensely focused on executing each project step carefully. Interim green status lights in a project like this do not guarantee success.

Efficiency gains are part of our business case. We are obviously talking about extensive investments at first. But it is also clear that we aim for efficiency improvements, which are reflected in our medium-term planning.

I ask for a bit more patience regarding the details. We will present the key aspects of our new multi-year plan at our annual financial press conference on 25 March. For now, I can say this: We aim to increase both revenue and efficiency.

AI is a crucial tool. We see ourselves as a „Smart Follower“. That means we closely monitor market developments to identify applications that can improve our offerings and processes for customers while also enhancing efficiency. We stay well-informed, exchange ideas with other financial institutions, and invest selectively. However, AI is not an end in itself. It is one of many tools in our methodological toolkit.

I cannot speak for other institutions. Each bank must define its own approach to AI. For us, staying close to developments and making selective decisions on what is meaningful and feasible for Nord/LB is key. We call this approach „Smart Follower“.

We aim to be a more profitable Nord/LB that takes the right risks. If you try to test or develop every possible AI use case, you may stay ahead of the curve but risk investing beyond what is necessary or into solutions that ultimately do not provide the expected benefits. That is not our approach. We carefully evaluate what works and where we have clear prospects for returns on investment.

Clearly, we must ensure that we are not left behind and that we have a strong team that closely monitors the market and trends. And we do.

We have established a virtual AI competence center at Nord/LB. It includes all areas, from market segments to central functions and IT. Treating AI purely as an IT project would be a major mistake. Handling and utilising AI is an opportunity for the entire bank. In this team, we gather all ideas for AI solutions to decide how to proceed, which ideas to implement, and how to prioritise them. At the same time, AI needs an anchor point in the organisation – particularly to ensure guidelines, regulations, and security. For us, this anchor is within IT.

This year, we want to take AI to the next level along two strategic paths. First, we are broadly deploying productivity tools. Since the beginning of the year, we have made the chatbot NORD.GPT available to all employees. It is built on OpenAI’s GPT architecture but operates in a secure environment, meaning our inputs do not train the model. NORD.GPT serves as a personal assistant for each colleague, helping familiarize the entire organization with AI’s capabilities. The initiative is accompanied by training programs for all employees.

I am convinced that AI expertise will be as essential in a few years as proficiency in PCs and standard software is today. The response to NORD.GPT has been highly positive: More than 1,200 employees – nearly a third of our workforce – have actively used the chatbot in the first few weeks, generating over 20,000 prompts.

Beyond productivity tools, we are focusing on specific „use cases“, meaning concrete applications.

I am referring to AI-driven solutions designed for a smaller group of users with tailored benefits. For instance, we are currently piloting an AI solution for contract review and generation in the legal department. We see significant opportunities to streamline our processes here.

The top priority at the moment is our „Fitt“ program. In addition, AI, cyber resilience, and IT security are among my top three priorities.

Of course, we are considering that, though long-term forecasts are challenging given the rapid pace of AI development. What is certain is that AI will continue to raise customer expectations regarding quality, speed, and convenience in their interactions with us. This motivates us to continuously improve. Thus, we primarily see AI driving changes in „how“ we operate rather than in „what“ we offer as a bank.

It is undisputed that AI will enhance productivity and reduce the need for simple tasks. However, quantifying the exact productivity gains over the coming years is still difficult.

Many studies discuss the correlation between AI and employment, but there is still little solid empirical data in banking. The impact of AI will vary by business model, function, and role. That is why we focus on practical experience rather than abstract estimates. But to be clear: We are not implementing AI at Nord/LB to cut jobs. Our goal is to make processes more scalable. AI may even help address the growing shortage of skilled workers.

I refer to Amara’s Law, which suggests that we tend to overestimate the short-term impact of technological innovations and underestimate their long-term effects. I believe this applies to AI as well. There is currently a lot of hype around the topic. However, I am convinced that, in hindsight, we will look at the rise of generative AI as an „iPhone moment“. AI will expand far beyond banking, profoundly impacting and transforming our world.

Currently, around 15 to 20 colleagues are working on AI. We are investing a mid-single-digit million-euro amount annually.

According to the IT industry association Bitkom, damages from cyberattacks in the German economy increased by 23% in 2024, reaching 266 billion euros. These are serious and growing risks that both the German economy and the banking sector, including Nord/LB, must take very seriously. We, too, are experiencing a rising number of cyberattacks. That is why we are investing heavily in security and resilience.

IT security, alongside the „Fitt“ program and AI, is one of Nord/LB’s most significant investment areas. Regulatory frameworks, such as the EU’s Digital Operational Resilience Act (DORA), play a role here. I welcome the unified European approach to IT security. In addition to DORA’s governance and technical components, we are also gathering real-world technical experience. For example, last year, we voluntarily subjected ourselves to a simulated cyberattack. External providers mimicked hacker tactics, techniques, and procedures without prior notice to our IT teams. The goal was to identify strengths and areas for improvement in our cybersecurity.

Insights from this voluntary test, along with the financial regulator’s cyber resilience stress test, have provided crucial learnings. These findings feed into a continuous improvement program for Nord/LB’s security posture. In simple terms: Strengthening resilience against cyberattacks and other threats is an ongoing task. Attackers are becoming increasingly sophisticated, and we must continually adapt.

No, we have not.

We selectively collaborate with external partners for targeted support but primarily focus on building internal expertise. This applies not only to security and cyber resilience but to IT as a whole. That is why we launched an IT internalization program in 2024. Over several years, we will bring 100 IT experts into the bank. This will increase the proportion of internal IT specialists from less than 50% to around 75%.

No. I strongly believe we need more in-house IT expertise – not just for resilience but also for bank management and our AI strategy. The expansion allows us to reduce reliance on external consultants and lower costs. But to be clear: The goal is to build knowledge, not cut costs. We are more than halfway through this process, having hired 60 of the 100 planned IT specialists.

Currently, we have around 330 employees in IT, and we are continuing to hire.