Monday 06 June 2016 3:34 pm

Deutsche Bank is ditching its plans for a digital bank

Digital challenger banks can breath a sigh of relief – competition just got a little less crowded.

Deutsche Bank was moving with the times with its plans for a new digital bank, revealed late last year in a board reshuffle.

Now, it's had a change of heart and has ditched plans for the new venture, a memo to staff from the bank's chief John Cryan reveals,

Very little had been revealed about the plans other than the appointment of its operating chief Henry Ritchotte to lead the project.

In the email to staff today, Cryan said it had "an excellent blueprint" for launching the bank in the US. But, Cryan is overseeing a turnaround of the German banking giant and cited it as one of the reasons for giving up on the venture.

Here's his letter in full:

Dear Colleagues,

In October 2015, we announced that Henry Ritchotte would leave the Management Board to pursue plans to set up a new digital bank for Deutsche Bank.

Since that time, Henry and a small number of colleagues have developed an excellent blueprint for launching a digital banking service in the United States.

Despite the quality of the blueprint, the Management Board has decided not to pursue building a digital banking service in the US at this time. Doing so would require us to divert resources from our core strategy of further focusing and innovating the Bank’s offerings to clients and re-building its infrastructure. We are determined to implement several ideas generated by Henry and his team in our business divisions.

In the coming weeks, Henry and I will discuss plans to redeploy his team into our existing businesses. We are grateful to Henry and his team for their excellent work.

There has been a rise in challenger banks, particularly in the UK, in the wake of the financial crisis. Many are selling themselves as banks for the digital generation, eschewing the high street branches. Meanwhile, established banks are increasingly trying to catch up with the habits and demands of millennials.