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SMU816

DBS: DIGITAL TRANSFORMATION TO BEST BANK IN THE

WORLD
In 2014, Piyush Gupta, CEO and Director of DBS Group, along with his leadership team, set the goal
for DBS to become the best bank in the world, ‘BBIW’, by 2020, by adopting a digital strategy. In
2015, the Board of Directors supported the new strategy, Strategy 2.0, with a S$200-million
(US$147-million) bet on DBS’ digital transformation, demonstrating their faith in Piyush and his
team.

The bank achieved its goal two years ahead of schedule. In 2018, it won Global Finance’s Best Bank
in the World award and Euromoney’s Best Digital Bank in the World (the latter was for the second
time, after winning the inaugural award in 2016). Then in 2019, it became the first bank in the world
to also be awarded the best bank in the world award concurrently from Euromoney, Global Finance
and The Banker, as well as receiving several other accolades.

The catalyst for DBS’ digital transformation was an outcome of the bank delivering results from its
2014 five-year strategy, Strategy 1.0, one year ahead of schedule, and also the rise of Fintech.
Strategy 1.0 had put in place the foundation for the bank to adopt digitalisation. It had laid out an
approach for DBS to become ‘Asia’s Bank of Choice in the New Asia’ by streamlining internal
systems, processes and performance measurements, and reorienting the culture towards better
decision-making and increased innovativeness and customer-centricity.

Strategy 2.0 focused on ‘Making Banking Joyful’ by leveraging digitalisation to make banking
‘invisible’ for the customer. It was launched in 2015 and implemented around three strategic
initiatives. The first was to be digital to the core, where most of the initial capital was invested. The
second was to be customer-obsessed by leveraging customer journeys that focused on making DBS
invisible to the customer; for example, via the online Marketplaces, customers would feel like they
were buying a house, not the mortgage; or buying a car and not the auto loan. The third component
was to create a start-up culture. This was the philosophy underlying DBS’ aim to become a ‘22,000-
person start-up’ (28,000 in 2019) by creating a culture of experimentation, innovation, and agile and
calculated risk-taking in delivering positive changes and outcomes for the customer and the bank.

By January 2020, it was apparent that the strategy had paid off, and DBS had been recognised as the
best bank in the world.

About DBS

In 1968, DBS was founded as the Development Bank of Singapore. With a key objective of financing
the economic development and industrialisation of Singapore, the performance of Singapore’s largest
local bank mirrored that of the country. Its property division funded the construction of numerous
buildings in Singapore’s early years, such as the Raffles City hotel-office-mall complex, Plaza

This case was written by Professor Annie Koh, Robin Speculand and Adina Wong at the Singapore Management University.
The case was prepared solely to provide material for class discussion. The authors do not intend to illustrate either effective
or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying
information to protect confidentiality.

Copyright © 2020, Singapore Management University Version: 2020-06-15

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SMU-20-0015 DBS: Digital Transformation

Singapura mall, and several offices downtown. In 1998, DBS acquired another local bank, POSB, to
have the largest retail banking presence in Singapore, as well as becoming Southeast Asia’s largest
bank.

As a key growth engine of the country’s financial sector, DBS launched many firsts in banking
products and services. It was responsible for the IPOs of stalwart Singaporean companies such as
Singapore Airlines in 1985, and Singtel in 1993. In 2002, it listed the first REIT on the Singapore
Exchange, introducing a new asset class to investors. In 2018, the bank celebrated its 50th anniversary
by driving several new projects, which included mentoring and supporting 50 social enterprises across
Asia.

At the beginning of 2019, DBS had a presence in 18 markets across the globe. Its priority markets
were its home market Singapore, as well as Hong Kong, Taiwan, Indonesia, India and China. With
more than 10 million retail customers and over 200,000 institutional customers, the bank recorded
S$5.63 (US$4.131) billion in net profit and S$13.2 (US$9.68) billion in revenue for the year 2018.

The Genesis of Digitalisation in DBS

In 2014, recognising that changing trends in the strategic landscape were rapidly bringing the threat
of Fintech to their doorstep, Piyush decided that DBS had to be faster and quicker than its competitors.
He had several reasons to do so.

First, he saw that Chinese tech companies such as Alibaba were making great strides not just in their
home country, but also going abroad with solutions such as the Alipay payments app. He elaborated,

When I compared notes with my counterparts in the West, I realised that they weren’t half as
paranoid as I was because they weren’t seeing what I was seeing every day. Sitting here in
Singapore and seeing what they were being able to do in China scared the bejesus out of me.

Second, DBS had emerged relatively unscathed in the aftermath of the 2008 global financial crisis.
Piyush reflected, “We were in a position of strength, where the bank could start thinking about
tomorrow’s battles, not yesterday’s battles.”

A third impetus for change was the failure to acquire Bank Danamon in Indonesia between 2012 and
2013 due to regulatory changes. It became quite clear to Piyush that growing the bank inorganically
was going to be challenging in the short- and medium-term given the difficult regulatory environment.
But he also saw this as an opportunity to start doing things differently – and going digital became an
attractive option in the course of pursuing growth.

The fourth and final catalyst for Piyush was a personal one. His background was in technology; he
had a personal disposition for and comfort with the domain.

1
US$1 = S$1.36 as at 1 January 2019.

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SMU-20-0015 DBS: Digital Transformation

Thus the seeds were planted for DBS’s digital transformation journey to begin, ahead of most other
banks. Piyush reflected, “I think when you put all of those [abovementioned factors] together, it
would probably explain why we embraced this digital journey sooner than many other people did.”

The leadership team launched the new digital transformation strategy ‘Making Banking Joyful’ in
2015, and redesigned their one-page strategy image of a house (refer Exhibit 1) that had been used
for Strategy 1.0 – which had become known as, “the house Piyush built”.

Strategic Initiatives and the Digital Scorecard

The direction and actions to take became clear as Making Banking Joyful and its Balanced Scorecard
worked together as a guiding light. 20% of the Balanced Scorecard was allocated to Making Banking
Joyful, 40% to traditional KPIs and 40% to strategic priorities (refer Exhibit 2 for further details).
Commented Peter Seah, DBS Chairman,

We share our balanced scorecard in our annual report and that tells everyone what our strategy
is. But we believe it’s the execution, which is the whole organization coming together, embracing
a new mindset, culture and direction, with everyone believing in it.

The leadership team worked on developing the new digital KPIs to track and measure the
implementation of the strategy, and created ATE; Acquire, Transact and Engage2. Piyush concluded,
“You manage what you measure. And because we started measuring it in a systematic way, this
forces people to continuously look at it and then build it into the business team’s way of working.”

DBS Chief Financial Officer Chng Sok Hui elaborated,

In the middle of the scorecard, we included metrics that pertained to the digital transformation,
and we put a 15% weightage on that in the first year. In 2017, we increased that weightage to
20% to reflect that digital value capture is increasingly important across the organisation (refer
Exhibit 3 for the 2018 digital scorecard).

To implement Making Banking Joyful, there were three key strategic initiatives, 1) Digital to the
Core, 2) Embedding ourselves in the Customer Journey, and 3) Create a 22,000 Start-up.

1. Digital to the Core

In order to become truly digital, DBS needed to turn its core legacy systems inside out. This became
the first component of the transformation strategy. Piyush explained,

There are a lot of people who would still argue against it, that it's really hard for legacy
companies to change. But we are convinced that this is the best way to transform. It could well
be that our Goldilocks size helps us make this transformation in a way that larger companies
might find more difficult. But certainly, we found it not only possible, but also really compelling
and productive to attack the core, to go for broke.

2
At a later stage, this became EATE as ‘E’ was added to measure ecosystems. This is discussed at greater length on Page 12 of the case
study.

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SMU-20-0015 DBS: Digital Transformation

Starting the Transformation of the Technology Core

Although the digital transformation strategy was made official in 2015, the beginnings of technology
transformation at the bank had already begun as early as 2010. Shortly after Piyush took over the
helm of DBS as CEO that year, he challenged David Gledhill (Dave), then Chief Technology Officer,
to look at overhauling and streamlining the bank’s technology backbone.

When Dave joined the bank in 2008, initial investment had already been made in revamping the
technology systems. By then, the bank was present in 12 markets, all with totally different core
banking systems. It was already three years into a supposedly two-year technology transformation
programme at its Singapore and Hong Kong operations. Dave assessed that this project was wildly
over-ambitious as there were no clear goals and business case. He said,

The budget was S$200 (US$147) million. They had already spent S$300 (US$220) million, and
reckoned it was going to take another billion dollars to complete. I cancelled that whole project.

This was a decision he had to defend to both Piyush and the Board, and later Piyush would comment
that this initiative was an expensive lesson, but an important one that was a down payment on digital
transformation.

From 2015, Dave and his team focused on a few key questions to crystallise the agenda around the
outcomes to be achieved from digital transformation. They asked some key questions: What did
being world-class in digital look like? How could the bank innovate with technology? What changes
were needed to get the business moving? To answer these questions, they visited several technology
companies. To think like a technology company and not always as a bank, Dave created a new
question, “What would Amazon CEO Jeff Bezos do?” In fact, the question, “What would Jeff do”,
caught on across the bank to transform people’s approach. Dave’s technology visits also gave birth
to a term, GANDALF, which became very popular to explain the bank’s digitalisation.

GANDALF

Let’s be the D in GANDALF.

- David Gledhill, former CTO, DBS

DBS started to explore the best practices they could adopt from the technology world, so that it would
be perceived as not only a bank, but also a platform company and technology integrator.

The first letters of Google, Amazon, Netflix, Apple, LinkedIn, and Facebook together spelt GANALF,
and Dave, a fan of the classic fantasy novel Lord of the Rings, coined the acronym ‘GANDALF’
(which also happened to be the name of a wizard in the book), setting a goal for DBS to be the ‘D’
in the company of global technology giants. The plan was for DBS to use open-source software like
Google, run on cloud platforms as did Amazon, use data and automation to scale and provide
personalised recommendations like Netflix, design like Apple, be a learning community like
LinkedIn and push for continuous learning, and become more collective like Facebook. Dave
explained the mindset shift that was needed,

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SMU-20-0015 DBS: Digital Transformation

We said to our people, ‘Don't compare yourself to other banks. Compare yourself to technology
companies because that’s now the benchmark we’re operating against.’ And it had this great
cultural effect of setting people free - to be bold enough to really drive change and not be
constrained by the way banks normally do things.

Implementing GANDALF

But merely having a sticker saying GANDALF was not going to get the undertaking very far. Having
studied the tech giants and their practices, Dave and his team came up with five key pillars that would
support how the bank changed the way it operated and drive digital transformation throughout its
core systems and processes: 1) shift from ‘project’ to ‘platform’; 2) organise for success; 3) develop
high performing agile teams; 4) automate everything; and, 5) design for modern systems (refer
Exhibit 4).

The team stipulated goals and set targets for each of the five pillars so that they could track and
measure performance, and then drove the adoption across DBS’ business teams and platforms.

Simultaneously the bank also attacked the levels of bureaucracy and moved away from steering
committees which required multiple approvals at every stage. In 2015, there were 198 ongoing
projects for the consumer bank division alone and the technology team needed to improve its cadence.
There was a shift from what Dave called ‘control to context’. He elaborated,

Let’s say you’re in charge of this set of platforms, say, the wealth management platforms. We're
going to give you some funding, and with that, you are to deliver the following outcomes:
customer growth, deeper penetration, new product services, whatever it is. You go figure out how
you're going to spend it to achieve these business outcomes. We’re not going to control every
dollar you spend through committees and approvals. Just go for it.

Teams were also reorganised for success. The shift to platform thinking meant establishing platform
teams to deliver the desired outcomes. Previously, business and technology would have separate and
potentially opposing goals, for instance, business had a revenue goal while technology would have a
resiliency (stability) goal. With the reorganisation, both sides would work together as one team with
shared goals and KPIs. The mantra, “business equals technology; technology equals business”, was
adopted, with both functions complementing each other to represent what Dave called DBS’ ‘digital
DNA’. To reinforce the mantra, “Two in a Box” was adopted, and was where the tech and business
head collaborated to understand each other’s business. The idea was that each head learnt the other’s
responsibilities, and was in a position to switch roles when required.

New principles such as DevOps were introduced, so that teams could formulate nimble and
appropriate responses to incremental feedback for new products. This was paired with the fourth
pillar, automation, so that new product rollouts or improvements could be tested and deployed to
market with minimal manual work and time to market, resulting in the maximum amount of rapid
learning from customer feedback. Dave observed,

Automated testing has dramatically increased–we're now almost 100% automatically deployed.

And lastly, designing for modern systems necessitated making changes to the very core of the bank’s
existing systems and processes. To do this, Dave and his team did two very crucial things.

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SMU-20-0015 DBS: Digital Transformation

The first was insourcing. DBS had historically outsourced most of its technology services to third-
party vendors. Dave quipped,

When I arrived at DBS, we were outsourcing 85% of our technology services. We had a bunch of
technology people signing contracts and managing members; we were doing contract
management, not building technology.

Dave’s objective was for the bank to develop strong technical skills of its own, and it started hiring
technology people. By the end of 2018, DBS’s technology was 90% self-managed. The bank was
effectively running like a tech company, and was able to build, design, run and operate all of its own
technology.

The second key thing that the bank did was to move its capabilities to the cloud. Dave explained,

It’s not about applying cloud lipstick but being cloud to the core. If you only move some of it, you
can achieve maybe 20% in operational savings. Moving everything is a lot harder to do, but it
can get you up to 80% cost improvement if you migrate from various legacy systems to cloud
native3 infrastructure.

With the move to the cloud, the bank managed to consolidate and shrink its physical data server
footprint by 75%, while still allowing for a 10x excess capacity to scale.

Not everything went smoothly. For example, in 2014, DBS partnered with IBM to deploy IBM’s
Watson cognitive computing innovation to enhance the customer experience. It was initially adopted
into wealth management. A couple of years later DBS terminated the IBM Watson partnership as the
computing power was more than they required. In 2017, DBS and IBM worked together again on
adopting Robotic Process Automation, making it the first-of-its-kind large-scale implementation in
the financial services sector in Singapore and the region.

Over time, the nature of the technology work being done had moved on from fixing the basics,
towards creating competitive advantage. Dave recounted, “Now, most of our effort spent is invested
in customer experience and digitalisation.”

2. Embed Ourselves in the Customer Journey

74% of the customers we surveyed said that they would rather go to the dentist than perform a
banking errand.

- Piyush Gupta, CEO, DBS

In May 2018, the bank changed its ten-year old tagline of “Living, Breathing Asia” to “Live More,
Bank Less”. This tagline for Strategy 2.0 initially created confusion, as staff wondered why they
would want their customers to bank less! But it was quickly realised that “Bank Less” meant making

3
Cloud-native applications were purpose built for the cloud model. These applications—built and deployed in a rapid cadence by small,
dedicated feature teams to a platform that offered easy scale-out and hardware decoupling—provided organisations with greater agility,
resilience, and portability across cloud environments.

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SMU-20-0015 DBS: Digital Transformation

it easier for customers to conduct their banking by leveraging digital. The new strategy was well
received and rapidly adopted across the whole bank.

At the same time, the internal mission was clearly defined as ‘Making Banking Joyful’ for customers
and employees alike. Piyush elaborated,

We spent a lot of time trying to think about what the soul of DBS should be, and what our role is
in the context of society at large. Banking or financial services is actually a very meaningful part
of life. We realised that the basic problem is that most people have started distrusting banks, and
most people think that banking is a pain. 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’.

One way to make banking joyful for the customer was to make it ‘invisible’, so that they could ‘Live
More, Bank Less’. To do this, DBS turned to mapping out the customer experience through ‘customer
journeys’, as well as using data analytics.

A significant question a leadership team needed to answer was, “What does digitalisation mean to
their employees?”

Continuing Focus on Customer Journeys

Paul Cobban, who had joined the bank in 2009 and assumed the role of its Chief Data and
Transformation Officer in 2017, had introduced customer journey thinking as a path for the bank to
carry out its processes under Strategy 1.0. This meant empathising with the customer by identifying
the “job to be done”4 and thinking of the ‘journey’ they took to carry out daily tasks, including
banking. Closely related to that was the idea that customers did not do banking for banking’s sake,
but to fulfil an ultimate purpose.

At the bank’s annual strategy planning off-site in 2015, Piyush and his 250-strong senior
management team officially kicked off the bank’s digital transformation journey. Out of the two days
allocated for the off-site, an entire day and a half was spent training the senior managers on customer
journey thinking, so that they were equipped to run customer journeys for their own teams. Each
leader had to adopt a customer journey, and was allocated five minutes to present on the projects
they were planning to roll out in the coming year to increase the digitalisation of their business lines—
something that was made part of their KPI for the year. 250 customer journeys were targeted that
year, and Piyush personally reviewed the progress.

By 2018, DBS was running a total of 600 end-to-end customer journey processes tied to Strategy 2.0,
with the goal of promoting digital means of transaction processing, acquisition or engagement with
the customer. Effectively, the bank would, through these customer journeys, embed itself seamlessly
into customers’ daily routines, accompanying them and facilitating their goals at every stage of their
life.

Data Analytics

4
This was a term adopted from Clayton Christensen, the B. Clark Professor of Business Administration at Harvard Business School.

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The use of data analytics was necessary for the bank to stay close to the customers, anticipate their
needs, and offer them recommendations that were relevant to them. Sameer Gupta, Chief Analytics
Officer, DBS (a role created in mid-2017), explained the bank’s objective in using data analytics,

People are obsessed with Big Data. We said Big Data’s not important; Big Analytics is important.

Piyush explained why having good data analytics made all the difference when engaging with
customers,

In banking, as the cost of customer acquisition is very high, it is a typical practice to try to cross-
sell new products to the customers. So one of the big holy grails is the ability to cross-sell. But
that is merely product pushing… how do you shift from cross-sell to cross-buy? Data lets you do
that. If you have good user data and you understand the context in which the customer is
operating, then you can come up with recommendations that would encourage the customer to
cross-buy instead.

To manage the potential questions and issues surrounding data appropriateness, privacy and security
that would come up with using the findings from data analytics, the bank formed the ‘PURE’
committee on decision-making surrounding how to use customer data. PURE stood for data that from
a customer’s perspective was applied in a way that was ‘Purposeful, Unsurprising, Respectful and
Explainable’. Internally, data access was granted to the extent that it corresponded to the roles that
people had vis-à-vis the customer.

Data First Culture

To create a data first culture, it was necessary to change the mindset of employees, the way people
worked and the way employees thought about making improvements. To achieve this outcome, DBS
targeted four essential components:

1. Culture: How could the company embed a data first culture in which employees leverage
data to enrich their decision making? This included, for example, eliminating decision-
making based on who talks loudest in a meeting.
2. Capability: How can capability be created across the bank?
3. Enabling: Traditionally data was locked down and released on request. Moreover, given the
risks involved, data needs to be protected. The challenge was to make data discoverable
(safely) and usable (reliability).
4. Tooling: How to develop infrastructure for the future, such as AI, machine learning, GPU
(Graphical Process Units), with secure data warehouse?

The bank also started hiring data scientists and reskilling business analysts to learn the tools to work
with data more effectively. Dave described the types of people that helped to bring about the data-
driven culture,

We have hardcore data scientists, who in many cases we hired. Then there’s a whole community
of data translators, who are mostly existing staff. They’re people who understand the business
and business analytics, who can be a bridge between the data modelling and everything else.

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SMU-20-0015 DBS: Digital Transformation

There were some early successes, such as engaging with HR to predict when a salesperson would
leave the bank, and being able to predict customer calls to the call centre.

Dashboards

The other initiative that DBS took to embrace a data-first and digital mindset was to do away with
the use of slide decks and instead employ dashboards for reporting. Items from the scorecards were
linked to the respective business and department dashboards, so that they could be constantly tracked.
The dashboards served two purposes: they enabled data visualisation so that users could clearly see
if the transformation was on track, and they also allowed the data to be drilled down to the product
level, customer level or even individual transaction level. This practice enabled the business teams
to make meaningful decisions.

Benefits of Increasing the Use of Digital Channels

Very early on in the digital transformation process, DBS had hypothesised that digitally active
customers would see much better outcomes in terms of incomes, revenue expense ratios and return
on equity than customers who were not digitally active. The bank termed this positive outcome
‘digital value capture’. DBS then began to track these two groups of customers, and the activities
they undertook separately.

Over three years from 2015 to 2017 in the Consumer and SME (Singapore and HK) segment, it found
that the total engagement of digitally active customers was manifold times higher than traditional
customers, through activities such as account balance checking and making payments. In Consumer
Banking, the multiple was 16 times, while in SME, the multiple was six times. The revenue per
digital customer was double the revenue of a traditional customer on account of an increased uptake
of products, higher loan and deposit balances, as well as higher credit card and investment
transactions. There were also substantial cost savings from servicing a digitally active customer who
did not need a relationship manager or paper forms to transact. Sok Hui commented,

The cost to income ratio is a lot lower - 34% for a digital customer versus 54% for a traditional
customer [in 2018]. The return on equity of this digital segment was 32%, ten percentage points
higher than for the traditional customer. In 2018, 48% of our customers were digital. They gave
us 68% of the revenue pie and 76% of the profit pie.

Digital Transaction

One of the key activities along the journey of becoming a digital bank was converting traditional
customers to digital customers, and convincing them to transact with the bank through its digital
channels. Sok Hui explained,

We came up with three criteria to separate digital from traditional customers. A customer was
digital if in the last 12 months, i) he had bought a product online, ii) he had done more than 50%
of his financial transactions online, or iii) he had done more than 50% of his non-financial
transactions (e.g., address update) online.

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SMU-20-0015 DBS: Digital Transformation

The criteria were first applied to retail and SME (Small Medium Enterprise) customers in Singapore
and Hong Kong, which made up 44% of the bank’s overall revenue mix. Digital customers were re-
qualified on a rolling 12-month basis. To maintain their digital status, customers would from time to
time be incentivised to use DBS’s digital services, such as being rewarded with a cash voucher if
they signed up for a new digital service.

Digital Engagement

To better engage customers digitally, the bank improved the user experience for its retail and
institutional digital platforms. For instance, in 2016, Sparks, a mini-series about the lives of young
bankers, was created in-house by DBS’ Strategic Marketing and Communications team. It was
watched by more than 250 million viewers by 2018, and played a part in triggering about 10% of the
customer inquiries that the bank received.

In May 2014, the bank introduced ‘DBS PayLah!’, a mobile wallet app that made peer-to-peer
payments possible just by knowing the recipient’s mobile phone number.5 This enabled the making
of cashless payments to individuals and small businesses alike. In December 2018, DBS further
enhanced this capability by adding QR code scanning capabilities for payment to recipients.6

Gene Wong, Head of Ecosystems, Consumer Banking Group, DBS, added,

DBS was the incumbent in Singapore and dominated the consumer banking space. PayLah! was
a fundamental piece of the puzzle for setting the agenda for cashless payments and could be the
main consumer app for all the customer’s lifestyle needs, such as movie tickets, transport and
dining. We thought, ‘This is our game to lose’.

In February 2017, DBS rolled out iWealth, an app for its priority and private banking clients. 7
iWealth would enable clients to access their investment portfolios at a glance and customise reporting
according to their preferences, such as by asset type or currency. In 2018, the Wealth business
division’s income grew by 26%. The same year, it also launched the POSB Smart Buddy Programme,
whereby parents could use a smartwatch to teach their children how to make digital payments, save
money, and also track their eating and spending habits.8

In October 2017, DBS introduced the Treasury Prism, the world’s first online treasury and cash
management simulation tool for institutional customers. The tool addressed the main pain points
faced by companies trying to arrive at their ideal cash management solution. Not only did the
Treasury Prism provide the benefits and costs of different cash management structures, but it also
took into account the relevant regulations and tax considerations that would apply in each country.

Digibank for Digital Acquisition

5
The Straits Times, “QR Code Payment Popular in Singapore and a Boon for Small Merchants, Says NUS study”, December 13, 2018,
https://www.straitstimes.com/business/...nus-study, accessed June 2019.
6
Ibid.
7
Rachel Boon, “DBS Unveils New Mobile App, Latest iWealth Website”, The Straits Times, February 11, 2017,
https://www.straitstimes.com/business/banking/dbs-unveils-new-mobile-app-latest-iwealth-website, accessed June 2019.
8
Claudia Lim, “Trying Out the POSB Smart Buddy Programme”, DBS, October 25, 2017, https://www.dbs.com/innovation/dbs-
innovates/...html, accessed June 2010.

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SMU-20-0015 DBS: Digital Transformation

On 26 April 2016, DBS launched digibank India, the first mobile-only bank in India.9 Digibank
demonstrated internally the potential of digitalisation, helping to build confidence and momentum in
Making Banking Joyful. It was a clear example of how being digital to the core enabled the bank to
penetrate new markets by offering unprecedented, innovative products with no physical presence.
Digibank evolved from the bank’s first hackathon and targeted to ‘design for no ops’. In fact, this
was not about designing completely for no operations – but more about eliminating the unnecessary
components and focusing on the value add, which was delighting customers. Data analytics was used
to reflect performance.

One of the initial challenges for the team was ensuring compliance with the banking regulation ‘KYC’
(Know Your Customer). This typically required a customer to visit a branch to confirm identification,
and was a difficult proposition when there was no physical presence in the country. However, the
API10 ecosystem that the bank was developing provided a solution by allowing it to partner with
Café Coffee Day, a local coffee chain with about 600 outlets throughout India. A customer could
walk into the store and open a savings account within minutes. The customers would present their
national identification Aadhar11 card to the barista, place their thumb on a point of sale terminal
provided by DBS that was linked to the government’s identity system for their thumbprint to be
biometrically validated, and open a bank account.

In addition, the bank went paperless for transactions and favoured digital payment instructions over
paper, although India was largely a cheque-based society. The customer journey was made easier by
enabling the payment instruction to be sent in just two or three clicks of a button. Customer service
was done through artificial intelligence (AI) virtual assistants or chatbots that were trained to answer
the most common questions. Karen Ngui, Managing Director and Head of Group Strategic Marketing
and Communications, described digibank as “branchless, paperless, and signatureless”.

Sok Hui observed the healthy uptake of the mobile banking service, “In India, as of beginning 2019,
we have over 2.2 million customers. That would not have been possible so soon if we were using a
brick-and-mortar strategy.” (refer to Exhibit 5 for more details on digibank India).

In November 2018, DBS launched digibank Indonesia, announcing local ride-hailing service GO-
JEK as its ecosystem partner.

Digital Ecosystems

In November 2017, DBS launched the world’s largest banking API platform. The platform went live
with more than 200 APIs and more than 80 DBS partners, ranging from Fintech start-ups to telcos.
The use of APIs enabled the bank to integrate external partners seamlessly into its digital ecosystem,
to create new customer applications and scale its range of new product and service offerings easily.
In 2018, DBS launched different Marketplaces for cars, property, and electricity, providing a reliable
source of such listings to its customers.12. As at August 2019, DBS had over 450 APIs.
9
“DBS Launches India’s First Mobile-Only Bank, Heralds ‘WhatsApp Moment in Banking’, DBS Newsroom, 26 April 2016,
https://www.dbs.com/newsroom/...banking, accessed May 2019.
10
‘API’ stood for Application Programming Interface. An API was a software intermediary that allowed two applications to talk to each
other.
11
Aadhaar was a 12-digit unique identification number issued by the Indian government to every individual resident of India.
12
Pailin Boonlong, “DBS Is No Longer Just A Bank - Their New Marketplace Lets You Buy Cars and Homes”, The Smart Local
Singapore, June 18, 2018, https://thesmartlocal.com/read/dbs-live-more, accessed June 2019.

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In January 2019, DBS published a research paper titled “Pivot or Perish: Ecosystem, the emerging
business model”.13 It defined an ecosystem as “Bringing together entities in disparate industries to
create new offerings or capture value that individual companies or sectors may not be capable of
creating on their own. Through ecosystems, marketers gain the ability to cater to customer needs,
without prompting the customer to look further than the company for a product.”

Gene explained how partnerships were a crucial part of welcoming customers into the DBS
ecosystem,

Customer engagements are happening out there in real life. We would be burying our heads in
the sand if we don’t recognise that it might take the customer 20 clicks on other websites before
they reach the DBS portal to transact. We have to partner with whomever the customer is in
contact with to acquire new customers. Furthermore, using non-traditional data for underwriting
is not possible without partnerships with third-parties such as telcos and ride-hailing platforms
that are in direct contact with the customer.

Sok Hui explained how the bank’s risk management framework expanded in sync to encompass the
broader ecosystem,

We made sure that as we grow in this area and our APIs get connected to more and more
ecosystem partners, the risk management aspects are also taken care of. We have a process to
know how data is transferred, and whether there are cybersecurity risks, etc.

At DBS, ecosystems were developed leveraging APIs by participating/investing where the customer
was, and then orchestrating to build into the customer lifestyle.

A New Scorecard Measure

Within the overall digital transformation, the bank measured four main activities that it believed
would bring about positive results from being digital with the customer, something that was
abbreviated initially as Acquire, Transact, Engage and later evolved to ‘EATE’ as Ecosystems
became a critical area to measure and manage the business.

3. The 22,000-Person Start-up

In 2014, to make a company of then 22,000 people operate more like a start-up needed some planning
and changes. Paul introduced ‘Culture by Design’ to identify the new desired culture, and what had
to be done to transform the culture. The acronym ABCDE made explicit the characteristics of the
start-up culture:14

Agile: adapt more quickly

Be a learning organisation: adopt new ways of approaching the business
13
DBS, “Pivot or Perish: Ecosystem, the Emerging Business Model”, January 10, 2019, https://www.dbs.com/... perish.xml, accessed
June 2019.
14
David Kiron and Barbara Spindel, “Redefining Performance Management at DBS Bank”, MITSloan Management Review, March 26,
2019, https://sloanreview.mit.edu/case-study/redefining-performance-management-at-dbs-bank/, accessed June 2019.

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Customer-obsessed: understand customers’ pain points

Data-driven: use data holistically to transform internal processes
Experiment and take risks: encourage the 4D process of discover, define, develop and deliver.

In order to help employees to more easily adopt the start-up culture, the bank ran a series of
programmes to acquaint employees at all levels with the practices of innovation and experimentation.
Paul explained the rationale behind the programmes that were rolled out,

I’m not a data guy; I’m a culture change guy. And culture change is more about behavioural
change rather than capability or technology. In order to get the best performance and most
traction, we had to build creative confidence, provide stable leadership and strategy, and ask
people to put the ‘t’ in transformation by setting the bar very low for them to be able to participate.

Daring to Experiment (and Fail)

From 2015, to eliminate the fear that people had of experimentation and taking risks, hackathons
were organised where employees would join with external coders and entrepreneurs (from start-ups)
to form a team of about ten people, for a three-day design session, which was proceeded by two-days
of education and problem identification.

On the first day of early Hackathons, the bankers were taught the methodologies to apply, such as
how to carry out customer journey thinking and conduct fact-finding interviews (refer to Exhibit 6
for more details on the 4D design process to understanding customer pain points and to create
solutions that addressed these pain points). The second day, they would be given a problem to solve.
Thereafter, the team had 72 hours to solve the problem through customer interviews, focus groups
and storyboarding. The objective was to create an app which the team had to showcase on the fifth
and last day.

To give recognition to people who aimed to innovate, the bank even created a ‘Dare to Fail award’
for those who tried something new and failed, thus giving the signal that it was okay to do so. Early
successes were given positive recognition and mentioned at town hall meetings. Piyush personally
reviewed each of the new projects or programmes the bank was undertaking every few months.

The third hackathon the bank conducted had the criterion that only bankers over the age of 40 years
old could participate. This was initiated by Piyush, after watching his 85 year old father shopping
and submitting his taxes online. Piyush wanted to quickly squash the notion that digitalisation was
only for younger bankers, and create the belief that age was not was a controlling factor. The over-
40s hackathon achieved this.

By 2018, around 15,000 employees had been involved in at least one innovation project.

Paul also shared the importance of removing obstacles, or ‘blockers’ to changing culture,

The number one blocker, as identified by our leaders, was meetings – too many meetings,
ineffective meetings, and people not understanding what they’re doing at the meeting. So we
experimented by creating a ritual, and ended up with ‘Meeting MoJo’. Where implemented, it
doubled the effectiveness of meetings. ‘Mo’ is the meeting owner and he has to do three things.
First, begin the meeting stating the purpose and context of the meeting. Second, at the end of the

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meeting, Mo has to summarise what was discussed during the meeting. Third and most important
of all is that Mo has to ensure that everybody in the meeting has an equal share of voice. And we
also appointed a ‘Jo’, which stands for ‘joyful observer’, who at the end of the meeting says how
well Mo did the job. An unexpected positive side effect is that Jo practises giving feedback, which
is a skill we often don’t use enough at work.

Digital Bankers

In 2017, HR introduced DigiFY, a mobile and online platform aimed at providing fundamental digital
training to DBS’s bankers to transform them into ‘digital bankers’.15 After completing the training
in the seven areas of agility, data-driven mindset, digital business models, digital communications,
digital technologies, journey thinking, and risk and controls, bankers would be certified and equipped
to pass on the knowledge to their colleagues.16

Digital transformation took place throughout the bank, not only in the business functions, technology
and operations, but the corporate functions as well (refer Exhibit 7 for further details on the digital
transformation initiatives in Audit).

Different methods were implemented to support employee’s transformation as the bank became a
learning organisation, such as eliminating approval for any skills training course less than S$500.
“iTQ” (I Thank You) was launched in 2017, an online peer-to-peer recognition program that made
saying thank you to anyone across the bank (and across geographies) straightforward. Leaders had a
reverse mentor to provide opportunities to learn areas of the business in a one-on-one meeting with
an employee. This also allowed them to probe and ask questions that they may not ask in meetings
or other situations.

In June 2018, Human Resources adopted the use of AI for recruitment—Southeast Asia’s first virtual
bank recruiter, “Jim” (short for Jobs Intelligence Maestro), was born as a result of the collaboration
between the talent acquisition team and an AI start-up. The custom-made system benefitted the
recruitment team by automating the pre-screening process, saving man-hours, and enabling recruiters
to focus on candidate sourcing and interviews. Jim’s round-the-clock availability enabled real-time
interaction with job applicants and the administering of psychometric assessments at any time
without coordination with HR. Jim was first deployed in the bank’s core markets and for high-volume
roles such as management associate positions, for which, out of 7,000 applicants, only 20 were
selected. Piyush attested to the effectiveness of Jim, “It allowed us to bring our turnover rates down.
We're hiring better people who are more suited to the job.”

What Next?

From 2014, DBS’ digital transformation had entailed overhauling the bank’s legacy systems from
the core, doubling down on its customer-centric approach to further embed itself into the customer
journey, and cultivating a start-up culture by design. Piyush commented,

15
David Kiron and Barbara Spindel, “Redefining Performance Management at DBS Bank”, MITSloan Management Review, March 26,
2019, https://sloanreview.mit.edu/case-study/redefining-performance-management-at-dbs-bank/, accessed June 2019.
16
Ibid.

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I think a lot of people would say that being able to put a Singapore bank on the world map is a
reasonably good achievement. To have the world's best bank come from this little red dot, that's
actually quite incredible. But for me personally, the biggest satisfaction actually comes from the
fact that the culture of DBS has changed. Most people would tell you–it's a new DBS… The fact
is that all of our people feel this immense sense of pride in what we are doing, and we're doing it
anchored around this whole purpose of really trying to make banking joyful. People believe we
are doing something different and meaningful. And that's a good feeling.

Making Banking Joyful had been well received; in 2018, the net profit of the bank was S$5.63 billion,
a 28% increase from 2017 and return on equity was 12.1%. Digital customers bring in twice the
income and have grown from 33% of the base in 2015 to 48% in 2018.

DBS had set its sights to become the best bank in the world by 2020. Despite the accolades won and
encouraging progress made so far, Piyush recognised that “We still have a lot of work to do before
we can compare ourselves with Alibaba and Google”.

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EXHIBIT 1: THE DBS ‘HOUSE’

Strategy 1.0 – The Asian Bank of Choice Strategy 2.0 – Making Banking Joyful
for the New Asia

Source: DBS

EXHIBIT 2: DBS BALANCED SCORECARD AND MANAGEMENT PROCESS

Source: DBS

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EXHIBIT 3: 2018 MANAGEMENT SCORECARD

Source: DBS AR 2018, p. 26.

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EXHIBIT 4: DBS’ FIVE KEY TECHNOLOGY ELEMENTS TO DRIVE CHANGE THROUGHOUT

THE ORGANIZATION

Source: DBS

EXHIBIT 5: ABOUT DIGIBANK INDIA

“DBS bank, Singapore’s largest bank and a leading bank in Asia, today officially unveiled digibank,
India’s first mobile-only bank. A revolutionary offering, digibank brings together an entire suite of
ground-breaking technology – from biometrics to artificial intelligence (AI) – to enable customers
to enjoy a whole new way of banking. Breaking away from conventional banking norms with their
onerous form-filling and cumbersome processes, digibank is a completely paperless, signatureless
and branchless bank. Other revolutionary features include:

• Customer service provided by a 24x7 AI-driven virtual assistant. Wherever they are, whatever their
need, digibank customers can converse with digibank’s AI-powered virtual assistant to get their
queries answered or banking transactions performed. Because the virtual assistant understands
natural language and has learning ability, it is able to respond in real-time. Today, it can already
anticipate and answer some 10,000 customer questions, with new knowledge added each passing
day.

• An intelligent, intuitive budget optimiser that helps customers be smarter about their money. In-
built into digibank is a budget optimiser that helps customers do their budgeting, track expenses and
analyse purchasing trends. The function is smart enough to understand customer behaviour and
preferences, synthesise data, and provide recommendations. For example, it can make sense of
customers’ spending habits to reward them with relevant, contextual marketing offers such as
restaurant discounts for a foodie or coffee vouchers for a caffeine-lover. It also studies customers’
spending patterns and prompts them if they are overspending.

• Recognising that safety is uppermost on consumers’ minds, digibank offers peace of mind through
dynamic inbuilt security. Most bank customers are used to receiving one-time passwords (OTPs) via
sms, and then typing codes into pages to authorise their mobile banking transactions. Digibank has

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an embedded soft token security, avoiding the need to wait for SMSs to arrive and providing even
stronger security for transaction authorisation.”

Source: “DBS launches India’s first mobile-only bank, heralds ‘WhatsApp moment in banking’”, DBS, April 26,
2016, https://www.dbs.com/newsroom/..._banking, accessed June 2019.

Digor, digibank’s mascot

Source, Digibank, ‘Hola, I’m Digor!’, DBS, https://www.dbs.com/digibank/in/digor-site.html, accessed June 2019.

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EXHIBIT 6: 4D DESIGN PROCESS

“4D Framework”

Discover, Define, Develop and Deliver

Discover involved researching methodically through customer immersion and then analysing the
results. This may end up in different personas requiring different offers, which allows for a well-
articulated “job to be done”.

Then the team methodically walks through every step the customer takes to Design the improved
experience.

As the team then moves to Develop, they keep in mind that it is not about the product features, but
the whole customer experience and solving the job to be done.

Only then do the team Deliver the job that had to be done.

Source: DBS

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EXHIBIT 7: DIGITAL TRANSFORMATION IN AUDITING

Agile Auditing

Derrick Goh, Managing Director and Head of Group Audit, shared,

Audit is the third line of defence (after business and compliance) to detect and alert the bank to
risk. We asked ourselves – how do we leverage data to deliver more value to our partner
stakeholders, in order to hunt risk and deliver the findings earlier?

The audit team began to periodically analyse 100% of the available data it had, rather than performing
random sampling using a traditional cycle-based approach. It built the capability to extract this data
itself, instead of waiting for the business to provide it. It moved from a deductive approach to a
predictive one, such as using machine learning to audit bank branches to detect patterns and identify
which branches were at higher risk, and allocating more audit resources to those branches.

The audit team also came up with a way to incorporate ‘agile’ management principles into its
practices, which significantly improved its effectiveness as a unit and strengthened its partnership
with business. While the traditional audit process would take up a lot of the business team’s time, the
agile audit process (refer to Figure 1 below) would only require 15-minute ‘sprint’ sessions. Both
sides would then discuss what actions should or should not be taken.

Figure 1. DBS’s agile audit flow process

The transparency, efficiency and helpfulness of the audit process brought about an unexpected
reversal of roles–-the business team started welcoming the opportunity to be audited, and requesting
for audits to be performed, instead of the other way round.

In 2015 and 2016, the audit team won the Institution of Engineers Singapore’s engineering awards
for its innovation in technology and use of data analytics in predictive risk identification.

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JoySpace

In 2017, the audit offices were transformed into ‘JoySpaces’ or activity-based workspaces. This was
an open plan office that enabled employees to work, eat and relax.

DBS audit scrum masters Bervia Chew and Cheryl Gan were unanimous when they explained that
“An integral part of our transformation journey is to change the concept of the traditional back-
office to a more progressive, fun and customer centric office hub. With ‘Joyspace’, it further enabled
us to foster a sense of community and collaboration among staff and simulate a community where
ideas are germinated.”

Source: DBS Investor Day Presentation, ‘Reimagining Audit’, November 2017,

https://www.dbs.com/investorday/presentations/Reimagining_Audit.pdf, accessed June 2019.
The Institute of Internal Auditors of Singapore, ‘The Future of Auditing in the Age of Digital Transformation’,
November 2017, https://iia.org.sg/content/future-auditing-age-digital-transformation, accessed June 2019.
DBs Careers, DBS Joyspace Programme, Photos,
https://www.facebook.com/pg/dbscareers/photos/?tab=album&album_id=381730132262682, accessed June 2019.

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