Digital Transformation Story Su Shan Tan 14 August 2018 The presentations contain future-oriented statements, including statements regarding the Group’s vision and growth strategy in the light of anticipated trends as well as economic and market conditions. Such statements necessarily involve risks and uncertainties, which may cause actual performance in future periods to differ from projections. 1
Largest bank in SEA Present in 18 markets globally, including 6 priority markets in Asia Total Assets (SGD) Income (SGD) Net Profit (SGD) 518 billion 11.9 billion 4.39 billion Over Over Over 8.8 million 200,000 24,000 Consumer Banking/ Employees Institutional Wealth Management Banking customers customers 2
2009 – 2014: Looking good… but? Group income (S$m) 9,618 8% CAGR 1 Income 6,603 13% CAGR 1 Net Profit 10.9% 8.4% ROE to 2014 2009 2009 2010 2011 2012 2013 2014 1 2009-2014
…the world was changing around us Globalisation of Platform Giants Cost vs Efficiency to Scale Up Start-ups Unbundling Banking Source: CB Insights
MAKING BANKING JOYFUL
Become Digital to the Core Embed Ourselves in the Customer Journey Make DBS ‘Invisible’ Create a 24,000 Start-up
Become Digital to the Core Embed Ourselves in the Customer Journey Make DBS ‘Invisible’ Create a 24,000 Start-up
Become Digital to the Core FROM TO LEGACY MICROSERVICES, CLOUD, APIs WATERFALL AGILE MANUAL AUTOMATED, DEVOPS PROJECTS PLATFORMS OPERATIONS DESIGN-FOR-NO-OPS ANALOGUE PAPERLESS 8 8
Being the in
To be a technology leader, we wanted to own and run our own technology 85% outsourced 85% insourced Objectives DBS Outsourced Build technology DNA Develop emerging skills (e.g. Agile, Cloud) Realise tech cost savings
Pushing the envelope on cloud… 2018 target – Data Centres: run 50% compute 75% reduction by 2019 on Public Cloud Typical banks Busy consolidating data centres … and doing some cloud vs Consolidated our physical data centres years back … we’re now shrinking 70% reduction in System Incidences, despite 166% increase in Operating Systems (2010-2017 Oct)
Aggressive automation has enabled us to move much faster and increase efficiency DevOps: % of automated application releases 100% Cadence – No. of monthly deployments 100% 2014 2017 7.5x 7.5X Volume of automated test executions 10x 10X 2014 2017 2014 2017
We launched the world’s largest banking API platform in early November 2017 60+ 180+ Live Live APIs partners 180+ 180
Become Digital to the Core Embed Ourselves in the Customer Journey Make DBS ‘Invisible’ Create a 24,000 Start-up
Embed Ourselves in the Customer Journey Make DBS ‘Invisible’ Making Banking Joyful My Everyday Life & Goals Intuitive Know, understand & predict TD Cards CASA Insurance My Finance Intrinsic Investments Payments Embedded in the customers’ life Loans Mortgages Invisible Seamless fulfilment My Way: Digital | Physical Channels 15 15 15
Employee Journeys 250 Customer Journeys
Cash from parents’ perspective… Transaction Journey Customer Journey We want to eliminate cash Different perspective on cash Discover Define Develop Deliver
POSB Smart Buddy was born… A contactless payments ecosystem to cultivate sensible savings and spending habits among young students in an interactive, engaging manner !
digibank … a bank in a smartphone 1.8M 1.8M Customer Customers in 18 months! in 18 months! 90 SEC SEC ACCOUNT CCOUNT OPE OPENING NING
Pushing the boundaries – how far can we go? Traditional Bank Operations = bank branch? digibank Operations 90%
Become Digital to the Core Embed Ourselves in the Customer Journey Make DBS ‘Invisible’ Create a 24,000 Start-up
What makes a 24,000 start-up? Customer Take Risk & Be a Learning Data-Driven Agile Obsessed Experiment Organisation
We set a target for ourselves… far exceeded that! 1,000 14,800 Experiments staff engaged in innovation programmes STARTUP XCHANGE IMAGINARIUMS INNOVATION API HACKTHATHONS BACKYARD & more…
Being Agile ▪ Agile between business & tech ▪ Agile @ Work… even when we audit Changing the way we work … ▪ DBS Singapore ▪ DBS Group Audit ▪ DBS Asia Hub 2, Hyderabad …to foster collaboration
We got our people to work with industry partners and start-ups to develop innovative mindsets 30+ Learning in different ways across the region … Business transforming into digital bankers Challenges Operations Gandalf Scholars Transformation Program 100+ Start-ups Lynda Learning Hour Speaker Series introduced Sandbox Evangelists Learning 500+ Participants in community events
VISIBLE OUTCOMES: Digital transformation pervasive Digital POSB digibank BusinessClass Tally Treasury Prism iWealth Onboarding Smart Buddy TRANSFORMING THE FRONT END… “It is demonstrably the case that digital innovation pervades every part of DBS ,from j consumer to corporate, SMEs to transaction banking and even the DBS Foundation.” Clive Horwood Editor of Euromoney HR Analytics digibank Virtual Contact Centre Fraud Monitoring ATM Analytics Open API Platform on RMs Assistant Analytics … WHILE RE -ARCHITECTING THE BACK END
YOU MANAGE WHAT YOU MEASURE 27
You manage what you measure: Balanced scorecard and management processes 40% Traditional KPIs Acquire Shareholders Customers Employees ▲ Channel share of digital acquisition Achieve Position DBS as Position DBS Transact sustainable bank of choice as employer ▲ Channel share of digital transactions Shareholders Customers growth of choice ▼ Manual transacting efforts Achieve Position DBS as 20% sustainable bank of choice Making Banking Joyful Engage growth ▲ Digital, contextual engagements with customers Digitally Joyful customers Digital value • Acquire & employees capture • Transact journeys Joyful customers & employees journeys • Engage Top 250 senior managers to sponsor 1 Journey each 40% Strategic priorities Geographies Regional Digital value capture businesses ▲ Number of Digital customers Geographies Regional businesses Enablers ▲ Income per Digital customer Regulators Society Society Regulators Higher income, lower costs: Better operating leverage, cost-income ratio, ROE as we shift from traditional to digital 28 28
CREATING SHAREHOLDER VALUE FROM DIGITALISATION
Putting Digital at the core of our strategy will allow us to • Acquire at scale and speed • Grow digital customers • Deepen engagement and stickiness INCREASE REVENUE • Expand & build new product capabilities • Rethink Distribution • Rethink Customer Service REDUCE • COSTS Enable RMs to be more effective • Digitalise internal processes 30 30
11.9 11.5 10.8 9.6 Income (S$m) 2014 2015 2016 2017 31
Case studies on DBS’ Digital Transformation DBS Transformation: Driving Digital Transformation The Digital Reinvention The World’s Best Digital Bank at DBS of an Asian Bank Rewiring the Enterprise DBS Bank: DBS Bank Fosters a for Digital Innovation: Transformation though Customer-Led The Case of DBS Bank Strategy Implementation Innovation Culture
Leadership Strategy Ambidextrous Leadership TELESCOPIC | MICROSCOPIC
IN INSI SIDE - OUT OUTSIDE - IN IN
Culture as Competitive (dis)advantage “Culture eats strategy for breakfast.” Peter ter Druck cker er
OUR REALIZATIONS 1. A movement needs a purpose Change is inevitable… might as well be on your terms 2. 3. Your people your strength 4. Leaders must lead 5. Digitization is tangible 36
Creating shareholder value from digitalisation Su Shan Tan 14 August 2018 The presentations contain future-oriented statements, including statements regarding the Group’s vision and growth strategy in the light of anticipated trends as well as economic and market conditions. Such statements necessarily involve risks and uncertainties, which may cause actual performance in future periods to differ from projections. 37
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