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Bidyut Dumra, head of innovation at DBS, speaks about how the bank is not merely trying to compete with other financial institutions, but with the top global technology companies.
You seek to operate a 29,000-person startup – how do you manage to maintain a startup mentality in such a large workforce?
At the beginning of our digital transformation journey in 2009, we recognized that if we wanted to be digital to the core and act like a tech company, we needed to learn from the best in the business. These were Google, Apple, Netflix, Amazon, LinkedIn and Facebook. Our mission was to become the ‘D’ in GANDALF. This has been an amazing rallying call to our employees. It started to make people realize what was possible and made us think about how we could step up to transform into a technology company. It is ironic that the same group that provides us inspiration also possibly represent our greatest threats.
To reimagine banking, we re-wired the organization to have a startup culture and mindset. We established experiential learning platforms, introduced new ways of working, re-designed office spaces, and fostered ecosystem partnerships to encourage our people to embrace a spirit of experimentation and innovation.
One of the success areas in our digital transformation has been our ability to change culture, to create an environment that embraces experimentation, and where innovation is mainstream. Consider business-as-usual morphed into innovation-as-usual across the bank. We have been committed to the idea that we have to take all our employees along on this journey. For this, investment in our people is imperative and re-training is key.
With new ways of serving customers better, including via our social media and live chat channels, Singapore customer center call volumes fell 8% in 2019. We also reskilled over 500 of our customer center employees to take on 13 new job roles including content creators, live chat agents and customer experience designers.
We are also committed to diversity, which we believe is a source of strength. DBS is already a leader in gender diversity – about 30% of our senior leadership team comprises women, with our CFO, Head of institutional banking and deputy head of consumer banking/ wealth management being women. In 2019, we also continued to recruit more female talent in technology – an area that is conventionally male-dominated – through targeted hackathons.
A startup mindset is one that is very accepting to change and ambition. One of the main reasons for our success is that our leadership is strongly supportive and models these traits. This is evidenced in our performance scorecards and incentives which apply to all employees. The talk and the walk are in sync.
What types of technology have been ‘game changers’ in the banking industry over the past 10 years?
Since 2009, the combination of technology and consumer preferences have had a transformative impact on industries globally especially financial services, with changes accelerating into the 2010s decade.
To operate more efficiently and round-the-clock, banks turned their focus towards technology to give customers self-service options and full automation. For example, ATMs were beefed up to accept cash and cheque deposits, as well as perform withdrawals in multiple denominations. Online/Mobile banking was enhanced to allow for internal transfers and payments to credit card or loans. Branch equipment was upgraded to scan cheques, deposit, and withdrawal slips, reducing the need for manual processes.
Today the pace of technological development, accessibility, and adoption is staggering. So, we categorize our views against what we need to ‘exploit’ and what we need to ‘explore’.
Technologies, like artificial intelligence (AI) fueled by big data are definitely in the exploit category with use cases only limited by our imagination. Here the question is not what should we do but more what we should not do. From digitizing manual processes to augmenting decision making, eventually, AI will permeate the entire technology stack. Infrastructurally, cloud, containerization, micro-services, 5G, etc., will provide the plumbing that will bring more possibilities that were limited by legacy technologies and architectures.
Technologies, like AR/VR, quantum, etc. are in the explore stage as their feasibility and viability still require more experimentation. And transitioning from explore to exploit are technologies like blockchain and IoT, as the use cases become more evident.
While DBS has had a head start in reinventing ourselves digitally, we remain unrelenting in harnessing and exploiting what is known and exploring what is unknown.
How is personalization changing banking services offered by DBS? How does the bank aim to achieve high levels of personalization for a large customer base?
With personalization, DBS aims to transform our interactions with customers by using data and analytics to anticipate their individual needs, customize solutions, and build deep relationships that can stand the test of time and disruption. For us, personalization is about providing service, information, and advice, ultimately to improve the customer’s banking experience.
In 2019, we made headway in becoming more data-driven, with DBS running over 150 projects leveraging advanced analytics. Some of these projects include using data to offer contextual marketing or hyper-personalization, as well as performing sentiment analysis so we can understand our customers better.
In places like India and Indonesia, we have also introduced data-driven algorithmic credit underwriting models. This has allowed us to approve small ticket-sized loans to individuals at a faster pace, making access to finance easier.
However, the most critical element is to ensure technology is always seen as the enabler and is subservient to understanding the customer and their job to be done.
What are the keys to competing with big tech companies?
To transform into a technology-driven company, it was imperative to have strong technology capability and DNA. We started insourcing our technology talent – from being 85% outsourced in 2014 to 90% insourced in 2019. Based primarily in our twin engineering hubs – DBS Asia Hub in Singapore and DBS Asia Hub 2 in Hyderabad – our team has grown over the years, with an increase of 24% or close to 6,000 technology professionals in 2019.
We started experimenting in innovative recruitment events such as ‘Hack2Hire’, ‘Hacker-in-Her’ and ‘Paradigm Shift’. ‘Hack2Hire’ included a coding challenge to recruit coders who are skilled at managing emerging and disruptive technologies across cloud, ML, and big data.
To date, we have received more than 100,000 applications globally through the ‘Hack2Hire’ and ‘Hacker-in-Her’ events, of which over 600 developers have been hired. We also attracted senior technologists from giants such as Google, Yahoo and Huawei, to create cutting-edge solutions in areas of APIs, cloud computing, SRE and expanding ecosystems. Going forward, we will continue to focus on attracting global talent that is specialized in new technologies such as 5G, internet of things (IoT), AR/ virtual reality (VR) and AI.
We invested heavily in our virtual private cloud infrastructure and rearchitecting our existing applications to be cloud-ready. Today, 93% of our existing applications operate in the new environment and 99% of our applications have been migrated from physical servers to the virtual private cloud. The migration resulted in the reduction of the number of physical servers and size of our data centers. For instance, the physical footprint of our secondary data center in Singapore was reduced by 75% while achieving a tenfold increase in capacity. Enabling our applications to run on both data centers concurrently also strengthened our systems’ resilience and reliability.
Another important aspect of our transformation was evolving the way we built our applications to keep pace with changes. The adoption of agile software development practices resulted in greater experimentation and innovation. Through continuous integration and continuous delivery, we delivered 300,000 automated builds and 30,000 code releases monthly, an increase of almost 10 times. This allowed our developers to release changes faster, making us more nimble.
We also strengthened our capabilities by changing how we operated our infrastructure and applications. Like Google, we leveraged site reliability engineering (SRE) principles to build stable systems efficiently and deliver quickly. The SRE practices enabled the creation of scalable and highly reliable applications and systems, and ensured consistency and governance. Taking a leaf out of the Netflix chaos engineering playbook and building upon it, we created ‘Wreckoon’, a self-service testing tool designed to test the resilience of applications in development. We remain committed in our transformation journey to enhance our infrastructure further in Singapore and Hong Kong, and to move into a hybrid, multi-cloud setup for the seamless movement of workloads, thus supporting computing at scale.
To further think and behave like big technology companies where we can respond to rapidly changing consumer demands with agility and scale, we have re-engineered our business and technology towards a platform operating model where business and technology work together with shared KPIs in an agile manner.
While we strive relentlessly to be at the forefront of technology, we are very conscious that technology is also becoming more accessible, hence, the differentiator is likely to shift from ‘what you use’ to ‘how do you use?’. This will be underpinned by ensuring we have a pervasive digital mindset through the organization that has ambitions to exceed their ability.
What is your approach to working with fintechs?
DBS is directly engaged with fintech startups and we run our own in-house accelerator programs.
One of our programs, Startup Xchange, is dedicated to fostering stronger fintech collaborations. Prior to the debut of Startup Xchange, DBS contracted third party vendors to address fintech-related challenges. The process typically involved a longer lead time to facilitate procurement and legal requirements. To replace the supplier-customer arrangement with a more collaborative and nimble approach, DBS introduced the Startup Xchange. The program matches the bank and its clients with startups that can co-create tech solutions to solve business problems. This accelerator is an on-demand always-on model which provides flexibility.
While most organizations are becoming even more prudent about working with startups, we believe there is a role to play in nurturing and nourishing the startup ecosystem within Singapore. The opportunity to work with an anchor brand like DBS paves the way for more customers and investors for startups. The support that Startup Xchange provides in co-creation and product evaluation is also critical in helping startups pivot their solutions. And this helps us to fuel a stronger entrepreneurial and creative spirit.
From my experience working with these companies as a mentor, they are typically experts in ‘tech’ but require expertise in ‘fin’. DBS has played a key role connecting the two, not only by providing subject matter experts, but also by delivering banking services that enable startups to connect their products to clearing infrastructures.
Some banks are creating ecosystems around their apps and services, what do you think about this strategy? Do you plan to do something similar?
Customers increasingly expect an end-to-end consumer experience irrespective of the fact that certain aspects may or may not be under the full control of the company they are dealing with. We recognized this and overturned our approach to customer service by starting from their perspective, rather than the logic and limitations imposed by our systems and processes.
In 2017, we launched the world’s largest API platform for a bank. Today, more than 400 partners are plugged into us via more than 500 APIs published on our platform. This allows us to not just provide better business solutions, but also to drive sustainability through financial inclusion. This fosters an Open Innovation model that allows for external parties to interact with the bank’s technology and build solutions and validate them prior to approaching us. This drives more quantity and quality in innovation.
A case in point is the DBS car marketplace, which we introduced following the Monetary Authority of Singapore’s proposal to allow banks to operate adjacency businesses. Launched in partnership with sgCarMart and Carro, it is not only Singapore’s largest direct seller-to-buyer car marketplace, but also Singapore’s first online consumer marketplace helmed by a bank.
Building industry ecosystems that offer an enhanced customer experience continue to be a key focus of our business. We continue to look for opportunities to form ecosystem partnerships where they can make banking simpler or more effortless for our customers.
What is your vision for DBS in 2030?
For DBS to be a successful bank for the future, we continue to embrace emerging technology, remain flexible to adopt evolving business models and most importantly, put customers at the center of every strategy.
A large measure of our future success will also lie in the contributions of our employees. We are committed to developing a future-ready workforce, driven through three ways – program-based learning initiatives, self-driven learning platforms, and having an environment that promotes experimentation.
DBS will be a place where employees will grow and be proud of what they do, as they will undeniably be valued and make a positive difference in the lives of our customers, partners, and communities.
To know more about DBS' strategy, download your copy of 'DBS Bank: An all-encompassing innovation leader', an exclusive paper reserved for Efma members.