How DBS Bank is riding the digital innovation wave

With more than 490 finance startups now calling Singapore home, nestled in the fintech capital of the world, the market could be forgiven for thinking a changing of the banking guard is underway. In addition to the Monetary Authority of Singapore (MAS) accepting 21 applications for new digital bank licences, spiking the interest of outsiders such as Grab and Vertex in the process, the liberalisation of the finance sector should in theory threaten the existence of the more established operators.

In the case of DBS Bank, established more than 50 years ago, the opposite is true.

Born in Singapore but renowned globally for digital advancements, the largest bank in the city-state operates as a benchmark for innovation and excellence within the finance sector.

DBS’s strategy for digital dominance

While no secret formula to success exists, an insatiable appetite for transformation can be cited as a foundational reason for such digital dominance. “In 2020, we will be diving even deeper into technology, scaling the use of data, artificial intelligence [AI] and machine learning while experimenting with emerging technologies,” said Jimmy Ng, group CIO of DBS. “We will also look at enhancing our digital and data infrastructure and continue to drive efficiencies in the way we build and operate our technology. Our nimble response to the COVID-19 crisis has been a good barometer of the efforts we have put in place so far and an affirmation that we are on the right track. We will continue to keep our eyes on the future and be ready when it comes knocking.”

At the centrepiece is a commitment to elevate technology infrastructure capabilities to capitalise on the next wave of digital transformation, building on more than six years of internal modernisation momentum.

The approach will result in the iconic bank shifting from a virtual private cloud to a hybrid multi-cloud model, in a move designed to combine the best of private and public cloud platforms. “We will adopt a containerisation strategy to improve portability and scalability while enabling faster deployment and productivity, which includes raising the bar on site reliability engineering,” outlined Ng, recently recognised in the inaugural CIO50 ASEAN awards. “Another area of focus is capitalising on the native services of the public cloud.”

In parallel, security across all layers — spanning cloud, data, applications and infrastructure — will also take priority, endorsed by the adoption of ‘privacy by design’ as a guiding principle to safeguard user data. “We are also pushing the needle on big data,” said Ng, who was appointed to the role in August 2019. “To optimise value from data, we intend to enable the organisation to generate greater insights from data that will improve customer experience, create new products and services, and change the way we work. Building a data-driven culture is key to this, along with developing clear guardrails on data governance and having a centralised enterprise data platform to make data more accessible.”

To stay ahead of the market, Ng said DBS is also exploring emerging technologies such as 5G, the internet of things (IoT), blockchain and quantum computing. This is in addition to augmented reality and virtual reality to help improve business outcomes while enhancing the customer journey.

In recognition of digital advancements, DBS became the world’s first bank to hold three global best bank honours at the same time. In 2019, the business was named the World’s Best Bank by Euromoney, following Global Bank of the Year from The Banker, and Best Bank in the World from Global Finance, both in 2018.

Customer science powers a digital bank

In a crowded Singapore and Southeast Asia market, DBS bank attempts to differentiate through a ‘Live more, bank less’ tagline. Granted, the tagline is the product of an opening rebrand investment of S$30 million, but underneath the campaign lies a truth — DBS is a digital bank.

“Leveraging the most advanced technology continues to be the way that we deliver on our brand promise,” Ng explained. “As we align to the new digital advances, we recognise that a complete digital customer experience should encompass the end-to-end process from acquisition, transaction to engagement. It is hence imperative to pivot towards a future servicing approach for a personalised customer experience through customer science.”

According to Ng, customer science connects customer behaviour with application and system data to understand the impact of behaviour on systems and vice versa. This aids in predicting and preventing problems before they occur, helping DBS understand customer demands through journey management, application health monitoring and workforce management.

“The next level of customer science is proactive and pre-emptive service management,” he added. “We aim to combine and connect customer behavioural data and system data to build real-time analytical models. This empowers us to have insights into individual customer issues and enables us to provide targeted resolutions. As we continue to build our real-time analytical capabilities, we strive to take it a notch up by hyper-personalising our services to our customer’s needs.”

‘Bottom-up, top-down’ technology strategy for innovation

Aligned to the belief that business and technology outcomes are intertwined, DBS’s approach to internal unification could be considered as gold standard, through dovetailing roadmap agendas to ensure strategic alignment.

Underpinned by joint oversight and accountability, Ng said the approach has transformed the way in which the bank operates through a healthy combination of ’bottom-up’ and ‘top-down’ initiatives. “The beautiful thing about DBS is that we have many innovations driven bottom-up by our staff and sometimes it is almost impossible to track them,” outlined Ng, referencing how the organisation carries out workplace planning through a virtual employee, leveraging QIRA (quantum image recognition application) technology.

“QIRA automates routine tasks such as monitoring call queue, service levels and load balance resources in real-time. The QIRA team — being avid gamers — drew inspiration from the gaming world (where bots were used to level up characters) and took up coding to develop QIRA the bot.”

More recently, the DBS team used network graph and analytics in contact tracing for COVID-19 cases. “These were all initiated by staff themselves, from analysing the problem statement to creatively using the technology and tools at their disposal, and collaboratively working with different stakeholders to solve their pain points,” Ng added. “This speaks volumes of the innovative culture and nimbleness that we have developed within the bank.”

Meanwhile, top-down initiatives are also commonplace, evident through Paradigm Shift, a global innovation hackathon covering over 70 markets including Brazil, Chile, Germany and the US. Participants were tasked with creating a customer-centric approach to developing new cutting-edge services for today’s digitally savvy users. More than 300 teams were formed with more than 170 concepts submitted, resulting in five teams walking away with top honours.

Another example of boardroom leadership is through DBS’s co-creation program, which leverages the bank’s innovation methodology to craft digital solutions with industry partners. “From mapping pain points to improving customer journeys, the program brought fresh innovation perspectives and tools to help clients reinvent themselves while supporting Singapore’s Smart Nation agenda,” Ng said. “We engaged 65 industry partners, such as those in the finance, healthcare, retail and automobile sectors, with 24 industry discovery workshops conducted to strengthen the digital ecosystem.”

In assessing the business benefits of digitalisation, Ng said all efforts are inherently tied to the bank’s financial bottom line. While technology costs are inevitable due to growth and new developments, since 2015, DBS’s technology spend has remained flat. “We see cost efficiencies through the optimisation in the operate space, which lowers the cost of running our systems and platforms every year,” Ng added. “As we virtualised 99 per cent of our applications, we are also reducing the real estate of our data centres while creating 10X capacity. With the cost savings, we are able to reinvest, spend more on increasing efficiency through automation and harness digital innovation to reap the benefits.”