Singapore Study on Harvard Case Platform Reveals What Sets DBS’ Digital Transformation Apartby Johanan Devanesan February 21, 2023
Singapore-based DBS Bank has become a top-ranked bank globally driven by its successful digital transformation initiatives, focus on sustainability, and high-quality customer service. DBS has managed to maintain its competitive edge by embracing digital innovation and staying at the forefront of the rapidly changing financial landscape.
DBS kicked off a purpose-driven digital adoption agenda in 2014, laying out a five-year roadmap that coincided with the rise of fintech and the earnest start of digitalisation for financial services. DBS Group CEO and Director, Piyush Gupta, set the lofty aim of being named the best bank in the world on the back of an ambitious digital strategy.
By 2018, the bank was already winning multiple awards and earning a reputation as the best bank in the world – two years ahead of the five-year plan. Since embarking on this transformation process, adopting digital has become something of a necessity for traditional banking and many financial institutions have sought to emulate DBS’ tactics, with mixed success.
A Singapore Management University (SMU) study published by Harvard Business Publishing analysed the three waves of purpose-driven transformation the bank went through: overhauling the bank’s systems, upgrading employee skills, and re-centering its customer focus, with the bank’s purpose growing bolder with each key milestone achieved.
DBS early digital transformation trailblazers in Southeast Asia
Founded in 1968 as the Development Bank of Singapore, DBS was one of the main development drivers of the island state. Besides developing a lot of notable locations around early Singapore, it was responsible for bringing new banking products and services to Singapore as well as spearheading the IPOs of landmark local companies such as Singapore Airlines in 1985 and Singtel in 1993.
Early investments in technology had been made in the late 2000s, when DBS launched a mobile banking app that was the first of its kind in the region. This move was a significant step towards digital transformation and enabled DBS to offer more convenient banking services to its customers. The app was an instant hit and helped the bank to gain a competitive advantage in the market.
Noting developments such as rising Chinese technology companies like Alibaba, the challenge of a complex, shifting regulatory environment and emerging threats from fintech startups who were disrupting areas like payments and loans, Piyush and then-Chief Technology Officer Dave Gledhill kicked off the three-pronged digital strategy in 2014.
DBS goes digital with core, cloud facelift
With a focus on measurable outcomes and a clear business case, the first step of the new Strategy 1.0 was to overhaul its core legacy systems. At the time DBS had a presence in 12 markets including Hong Kong, Taiwan, and India with all of them employing different core technologies.
CTO Dave said a mindset change was required internally, shifting the thinking from being seen as a major incumbent bank to thinking like a major technology company. Among the practices adopted from observing major tech firms like Google, Apple and Amazon was to track and measure performance for a ‘platform’ instead of a ‘project’, reorganise teams agilely for goal-oriented success, automate as much as possible, and design for modern systems.
To achieve the core transformation, Dave switched from outsourcing most of its technical developments to hiring a tech of technologists in-house. “By the end of 2018, DBS’s technology was 90% self-managed” according to the SMU case study, with most of its capabilities migrated to the cloud allowing for 10x excess capacity to scale operations, while shrinking its physical server footprint to just a quarter of prior output.
Reimagining customer journeys end-to–end
The second major digitalisation pillar was to focus on enhancing the customer experience. The internal mission statement was branded as ‘Making Banking Joyful’ for customers and employees alike. This meant removing barriers to customer engagement, prioritising customer journey satisfaction, and focus on training DBS employees on both digital and customer-oriented outcomes.
“We realised that the basic problem is that most people have started distrusting banks, and most people think that banking is a pain,” explained Piyush. “The question was how do you take financial services, make it really simple, fun and meaningful to the customer to help them improve their lives in whatever way they wanted? That’s the idea of ‘Making Banking Joyful’.”
Key to understanding customer journey thinking was to pivot to a data first culture, relying on data from digital scorecards and analytics from dashboards in real-time, instead of slide decks and proposals that might be outdated by the time the data is reviewed. Previously siloed sensitive financial data had to be reliably and securely accessible by the internal value chain, from decision makers to customer support personnel.
This ability needed to be available across the organisation, and the infrastructure needed to be in place to allow for future ecosystem developments that would feature technological enhancements like AI, machine learning, and robotic process automation that automates manual processes and reduces the processing time for transactions. This has helped to improve the bank’s productivity and has enabled it to offer faster and more efficient services to its customers.
Creating startup culture in a 22,000-strong company
Trying to turn an organisation with a headcount of 33,000 employees to operate more agilely like a startup was no mean feat. DBS ran a variety of programs and initiatives aimed at familiarising staff with the new desired culture.
One of the projects was a series of hackathons, where workers were teamed up with software coders and startup entrepreneurs to learn how to navigate customer pain points. Training included “how to carry out customer journey thinking and conduct fact-finding interviews”, problem-solving, and experimenting with different methodologies (not to mention analysing the data to ensure goals were set and targets were met).
The bank awarded recognition to employees who stood out in their drive to innovate, creating a ‘Dare to Fail’ award and honorary mentions at town hall meetings for team members with the wherewithal to push the boundaries of disruption. CEO Piyush even held a hackathon exclusively for over-40-year-old employees to make it clear that the DBS digital drive was for all staffers, not just the younger generations.
Culture change “blockers”, such as too many meetings, were ineffective and should be reduced. Meanwhile, digital tools were assisting to transform DBS bankers into digital natives, regardless of age. DBS adopted various technologies for various purposes, including DigiFY, a mobile and desktop platform to supply training to the bankers.
The Making Banking Joyful campaign proved successful in record time, two years ahead of the planned five-year strategy. In 2018, the net profit of the bank was recorded at SG$5.63 billion. “Digital customers bring in twice the income and have grown from 33% of the base in 2015 to 48% in 2018,” noted the case study.
DBS outperformed that in 2022, despite coming off the pandemic period, setting a record performance as net profit grew 20% from the previous year to SG$8.19 billion.
With the help of technology, DBS was named the ‘World’s Best Bank’ by US-based financial publication Global Finance, for five consecutive years. Amongst other accolades the bank has accrued over the years include being named ‘World’s Best Digital Bank’ by Euromoney and the world’s ‘Most Innovative in Digital Banking’ by The Banker.
Featured image credit: Edited from Unsplash