MIS Quarterly Executive

Volume 15 Issue 2 Article 4

6-2-2016

How DBS Bank Pursued a Digital Business Strategy

Siew Kien Sia
Nanyang Technological University, asksia@[Link]

Christina Soh
University of North Carolina Greensboro, Lsiyer@[Link]

Peter Weill
University of North Carolina Greensboro, czbradbe@[Link]

Follow this and additional works at: [Link]

Recommended Citation
Sia, Siew Kien; Soh, Christina; and Weill, Peter (2016) "How DBS Bank Pursued a Digital Business Strategy,"
MIS Quarterly Executive: Vol. 15 : Iss. 2 , Article 4.
Available at: [Link]

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How DBS Bank Pursued a Digital Business
Strategy
Business digitalization is changing the competitive landscape in many industries. Digi-
tally savvy customers are demanding more while threats of digital disruptions from
new entrants are rising. This article describes how DBS, a large Asian bank, responded
to digital threats and opportunities by adopting a digital business strategy. It identi-
fies the capabilities needed and provides lessons for organizations aspiring to pursue
a successful digital business strategy.1
Siew Kien Sia
Christina Soh
Nanyang Technological University (Singapore)

Peter Weill
MIT Sloan School of Management (U.S.)

Banks Need to Adopt a Digital Business Strategy 1

Business digitalization is changing the competitive landscape for many industries, and the
banking industry is no exception. With the rapid adoption of the Internet, ecommerce and
smartphones, consumers are increasingly turning to computers, tablets, mobile phones and
smartphones to interact and transact with banks. As a consequence, because bank customers
are visiting branches less frequently, the number of physical bank branches has declined
steadily over the years. This trend will likely continue—for example, McKinsey sees a sharp rise
in digital banking consumers, estimating that the number in Asia will rise from 670 million in
2016 to 1.7 billion by 2020. At the same time, a new breed of digital players is entering the
finance industry. Referring to the growing threat of the “fintech”2 revolution, JP Morgan Chase
Chief Executive Jamie Dimon cautioned in a letter to shareholders that “Silicon Valley is coming”
to the banking sector.3 Such digital disruptions can destroy significant value for banks—
McKinsey estimates that 30% to 50% of net profit in banks could be at risk.4
Banks have begun to respond to the digital challenge. For example, Hana Bank in South
Korea launched its N mobile platform, which allows customers to use their smartphones to
withdraw cash from ATMs, send money and pay at stores.5 Money management functionalities,
location-based offers and credit facilities are also integrated into the platform.
1 Dorothy Leidner is the accepting senior editor for this article.
2 Fintech refers to a new generation of financial technology startups that are revolutionizing the financial industry, from payment to
wealth management to peer-to-peer lending to crowdfunding.
3 Dimon, J. “Letter to shareholders,” JP Morgan Annual Report, 2014, available at [Link]
ONE/15660259x0x820077/8af78e45-1d81-4363-931c-439d04312ebc/[Link].
4 Digital Banking in Asia: winning approaches in a new generation of financial services, January 2014, McKinsey & Company,
available at [Link]
winning%20approaches%20in%20a%20new%20generation%20of%20financial%[Link].
5 Baxter, M. and Vater, D. Building the Retail Bank of the Future, Bain & Company, June 18, 2014, available at [Link]
com/publications/articles/[Link].

June 2016 (15:2) | MIS Quarterly Executive 105

How DBS Bank Pursued a Digital Business Strategy

However, many banks are finding it banking apps). For example, Commonwealth
challenging to respond to the digital threats and Bank of Australia engaged with its customers
opportunities and are struggling to compete in throughout the entire home-buying process
an increasingly digital marketplace. They are by integrating a property listing database and
often weighed down by their legacy IT systems the full range of mortgage services on a simple
and cumbersome legacy processes. Burdened mobile app.8 Other banks are also experimenting
by heavy compliance requirements, these banks with innovative digital offerings, but often within
also have little capacity to experiment with digital a particular business function or division.
innovation. Yet digitalization hits at the core of a Moving forward, however, there is a growing
bank—i.e., the digitalization of money and all the sense that such functionally oriented experiments
related functions around money. fail to maximize the potential of digital business
IT is not just critical in the running of strategy. A digital business strategy is inherently
banking business but is also an important cross-functional and thus requires simultaneous
source of banking innovations and has strategic development and reconfiguration of IT and
implications for future banking models. Hence, business resources across multiple organizational
it is not sufficient to simply align functional IT processes. A more holistic and integrated
strategy with business strategy. IT needs to be approach is needed if companies are to respond
pervasively embedded in every aspect of a bank effectively to the threats and opportunities arising
and be an integral part of the business strategy. from digitalization. To do so, companies need to
The IT strategy of a bank is thus inextricably develop several related capabilities in the areas
fused with the business strategy. Bharadwaj et of leadership, operations, customer needs and
al. termed this fusion of IT strategy and business innovation.
strategy digital business strategy.6 How can a Leadership. CEOs need to be transparent,
bank pursue such a digital business strategy? adaptive and resilient, and senior executives
How can it be transformed or “rewired” to must acquire new competencies.9 The senior
achieve the fusion between business and IT so management team must be “ambidextrous,”10
it can respond to the new digital threats and able to understand the potential and challenges
opportunities? These are the questions that this of digitalization and have a shared vision of
study aims to address. digitalization being central to the growth of the
business. Top management leadership is crucial
Pursuing a Digital Business for articulating the digital business strategy
Strategy and for aligning the necessary investment in
resources.
Best practice for pursuing a digital business Operations. The pursuit of a digital business
strategy is still in its infancy. Most organizations strategy requires a robust and flexible enterprise
simply respond to new digital threats and platform on which digital products and services
opportunities in an ad hoc manner within some can be readily delivered. These digitized business
organizational functions. For example, some processes, based on standards and integration
firms have embraced social media as part of their strategies, enable flexible service provision and
digital initiatives within their marketing functions dynamic reconfiguration of the supply chain or
but do not actively link these initiatives back to business partnerships.11
their core IT infrastructure.7
Similarly, many banks have begun exploring
the digital realm—most often by offering current 8 Baxter, M. and Vater, D., op. cit., 2014.
banking services through online or mobile 9 Bennis, W. “Leadership in a Digital World: Embracing Trans-
parency and Adaptive Capacity,” MIS Quarterly (37:2), 2013, pp.
channels (e.g., launching new websites or mobile 635-636.
10 O’Reillu, C. A., and Tushman, M. L. “The Ambidextrous Orga-
6 Bharadwaj, A., El Sawy, O. A., Pavlov, P. A. and Venkatraman, nization,” Harvard Business Review, April 2004, available at https://
N. “Digital Business Strategy: Toward a Next Generation of Insight,” [Link]/2004/04/the-ambidextrous-organization.
MIS Quarterly (27:2), 2013, pp. 471-662. 11 Markus, M. L. and Loebbecke, C. “Commoditized Digital Pro-
7 Hansen, R. and Sia, S. K. “Hummel’s Digital Transformation cesses and Business Community Platforms: New Opportunities and
Toward Omnichannel Commerce,” MIS Quarterly Executive (14:2), Challenges for Digital Business Strategies,” MIS Quarterly (37:2),
2015, pp. 51-66. June 2013, pp. 649-653.

106 MIS Quarterly Executive | June 2016 (15:2) [Link] | © 2016 University of Minnesota
 How DBS Bank Pursued a Digital Business Strategy

Customer needs. Companies also need to banking and wealth management. DBS’ network
develop the ability to respond swiftly to the centers on three key Asian markets—Greater
demands of a growing number of digitally savvy China, Southeast Asia and South Asia—with over
customers. This requires the digitalization of 280 branches across 17 countries. Since 2009,
products, services and customer relationships, when Mr. Piyush Gupta was appointed CEO, DBS
and the seamless integration of functional silos has been aggressively investing in IT to create an
across the enterprise. Deeper analysis of the infrastructure platform for regional growth.
new value propositions to customers in the The need for DBS to leverage digital
digitally enabled context is required. These value technology was also driven by the changing
propositions include benefits such as greater nature of Asian consumers. In Asia, there were
accessibility, higher affordability and wider social over 700 million digital banking users in 2014,
connectivity.12 expected to grow to 1.7 billion by 2020.15
Innovation. Companies face the challenges of Generally younger and more mobile-centric
innovating to continuously stay at the cutting Asian consumers were leading the adoption
edge of technology and of keeping in touch of smartphones and preferred to engage with
with evolving customer needs.13 This requires businesses in a very different way. This could
developing an innovation ecosystem with be seen in the fast growth of digital banking in
external partners, including customers. Keen and Asia. Between 2011 and 2014, digital banking
Williams14 highlight the new realities of value penetration in the developed markets in Asia,
sources in the broader digital ecosystem; the including Singapore, Hong Kong and Taiwan,
strategic challenge is to identify and capture these rose from 59% to 92%.16 In emerging Asian
dynamic sources of value, which requires new economies, the penetration rate was 33% in
forms of collaboration, new processes and new 2014, up from 10% in 2011. Moreover, 82%
infrastructures. of high-net-worth individuals in Asia-Pacific
Existing research, however, reveals little about expected the relationship with their private banks
how banks can make such a holistic transition. to be conducted mainly through digital channels
There are few comprehensive accounts on how in the next five years, compared to 61% in the
banks have embarked on such radical enterprise- rest of the world.17
wide digital transformations. The examples tend To strengthen its presence and reach across
to be anecdotal, often just focusing narrowly on the Asian markets, DBS formulated a strategy to
a key digital initiative launched by a bank and put technology at the core of its banking business.
lacking an in-depth account of the transformation From 2010 to 2014, the bank spent S$600
journey. The authors have studied one bank— million18 annually on technology. An additional
DBS, based in Singapore—that has radically S$200 million will also be committed for the next
reorganized (or rewired) itself to pursue a three years.
successful digital business strategy (see the
Appendix for more on the research methodology). “Whether we know it or not, the digital
DBS’ transformation journey is set out below. revolution has put banks under siege.
With Internet 2.0 and mobility, the game
DBS Bank Background has been redefined. Banks in Asia are on
a burning platform of competition from
DBS Bank (DBS) has grown from a Singapore mobile and Internet companies. If we don’t
bank to become the largest bank by assets in embrace digital—and quickly—there is a
Southeast Asia, providing a full range of financial real danger that our lunch will be eaten. It is
services for institutional banking, consumer only a matter of time before the disruption
12 Srivastava, S. C. and Shaniesh, G. “Bridging the Service Divide
that the retail and telecom industries have
Through Digitally Enabled Service Innovations: Evidence From
Indian Healthcare Service Providers,” MIS Quarterly (39:1), 2015, 15 McKinsey & Company, op. cit., 2014.
pp. 245-267. 16 Ibid.
13 McKinsey & Company, op. cit., 2014. 17 Asia-Pacific leads world in wealth growth, Capgemini and RBC
14 Keen, P. and Williams, R. “Value Architecture for Digital Busi- Wealth Management, October 21, 2014, available at [Link]
ness: Beyond the Business Model,” MIS Quarterly (37:2), 2013, pp. [Link]/news/asia-pacific-leads-world-in-wealth-growth.
642-647. 18 As of April 2016, S$1 = US$0.74.

June 2016 (15:2) | MIS Quarterly Executive 107

How DBS Bank Pursued a Digital Business Strategy

Figure 1: Key Thrusts of DBS’ Digital Transformation Strategy

Cultivating Leadership for Digital

Transformation

Dynamic Threats and

Opportunities from Digital
Disruptions: Developing Agile and Scalable Digital
• Rising demand from digitally Operations
savvy customers
• Emerging threats from
fintech revolution
• Digital as the new platform Designing New Digitally Enabled
for growth Customer Experiences

Incubating and Accelerating Emerging

Digital Innovations

experienced befalls banking. Monumental 1. Cultivate Leadership for Digital

change is just around the corner and Bill Transformation
Gates will be proven right when he said The most vocal champion for digital
that people need banking, but not banks.”19 transformation in DBS was the CEO, Mr. Gupta.
Piyush Gupta, CEO, DBS Recognizing that banking was undergoing
“cataclysmic disruption,” he personally
championed the digital agenda to “put digital
Rewiring DBS Bank For the at the heart of banking.” A question that he
Digital Era continually asked his senior executives was how
The key thrusts of DBS’ digital transformation well the business was exploiting the digitalization
strategy involved strategic initiatives and of banking products and services. Technology
proactive efforts to (1) cultivate digital leadership was a key component of DBS’ overall business
among senior executives, (2) build agile and strategy. For example, he commented on the use
scalable digital operations, (3) design new of digitalization in overcoming the constraints
digitally enabled customer experiences and of physical banking infrastructure in DBS’
(4) incubate and accelerate emerging digital regionalization drive:
innovations (see Figure 1). “If we are able to leverage fintech, and offer
“The point about moving to information banking through digital channels, the need
and mobile [digital] is that we need to for a large geographic footprint in order
rethink what our business strategy is and to scale up in large geographies such as
how our business model is going to change. China, India or Indonesia becomes less of
It is not just about developing mobile apps an imperative. A successful digital banking
but about rethinking the organization. How strategy will enable us to accelerate our
do you rewire an organization for [digital access to emerging markets without the
transformation]?”20 David Gledhill, Head of need for a large and expensive bricks and
Group T&O (Technology and Operations), mortar network.” Piyush Gupta, CEO, DBS
DBS The Group Executive and the new Head
of Group Technology and Operations (T&O),
19 Gupta, P. Banking Disrupted, DBS Bank, 2014, available at David Gledhill, reported directly to the CEO and
[Link]
20 Discussing the evolution of mobile connectivity, Info-communi- were key members of DBS’ central executive
cations Development Authority of Singapore, April 3, 2014, available committee, which steered the bank’s vision and
at [Link] strategic directions. Additionally, senior banking
evolution-of-mobile-connectivity.

108 MIS Quarterly Executive | June 2016 (15:2) [Link] | © 2016 University of Minnesota
 How DBS Bank Pursued a Digital Business Strategy

executives were kept up to date with the latest traditional senior bankers with a bunch of
developments in the digital landscape through 20-year-old coders and see what happens.
various forums to help them see the potential It’s fascinating to watch. On day 1 or 2, there
disruptions and threats of disintermediation are two camps, the bankers and coders,
from new market entrants. For example, Ms. neither really sure of what to think of each
Tan Su San, head of the Wealth Management other. By the end of the week, there’s such
Division, became more acutely aware of the passion and intensity about what they are
rapid commoditization of wealth management creating that we really think we’ve [ignited]
by online retail investment players (e.g., a very magical spark [that] changes
Fundsupermart in Singapore). As customers people’s thinking in the organization.” Neal
bypassed traditional wealth management Cross, Chief Innovation Officer, DBS
advisors and put their money directly into funds,
the lucrative management fees that banks collect The cultivation of leadership for digital
for wealth management services were at the risk transformation was not just restricted to senior
of “becoming history.” executives but also systematically cascaded
Committed to transforming herself from a down the hierarchy to mobilize the change
“technology idiot” to a “digital warrior,”21 Ms. Tan’s agenda. Investments in collaborative technology
response to the digital threat was to deploy IBM (e.g., a unified communication infrastructure,
Watson, a cognitive cloud-based data analytics telepresence videoconferencing systems and
solution in the Wealth Management Division. IBM enterprise portals) facilitated enterprise
Watson helped relationship managers (who may coordination and the gathering of feedback from
have 100 to 200 clients) analyze complex market different stakeholders. Mr. Gledhill explained
and customer data so they could deliver greater how he pushed his employees to participate in
value to DBS’ customers. the new development: “We encourage people to
This initiative was just one of the many speak up, to put their views on the table. We want
technology investment decisions jointly planned people with the change agenda. This is a big shift in
by senior business and technology executives culture.”
through their annual technology road-mapping For example, the “Ask Piyush” e-forum was
workshops. The close collaboration between set up in the internal enterprise portal in 2011.
business and technology executives was This forum encouraged staff across the region to
evident in the strong business ownership of the provide regular feedback or make improvement
technology roadmap; the business heads, not suggestions directly to the CEO. The portal was
their IT managers, would present their strategic open for specific periods, timed to coincide
IT plans to senior executives themselves. with Mr. Gupta’s quarterly town-hall meetings.
Increasingly, senior banking executives were The forum proved to be an effective channel for
also encouraged to innovate and think digitally, getting wider inputs from employees, cutting
just like “technopreneurs.” Even leadership through the layers of bureaucracy in a large firm
development programs were revamped and like DBS. As Mr. Gupta shared, “What’s important
structured as hackathons.22 is that [the portal] has allowed people to feel they
were part of the process of [making a] change.”23
“Yes, it’s a huge cultural change. In the past,
our leadership program has been all about 2. Develop Agile and Scalable Digital
leadership skills, communication skills. We Operations
scrapped all of that and our leadership For greater responsiveness, the previously
program now is all about hackathons: [we] separate Technology and Operations Divisions
take every one of our senior leaders for a in DBS were merged to form a new Group
one- or two-week hackathon. We … mix Technology and Operations (T&O) Division under
Mr. Gledhill. As the Head of Group T&O, he was
21 Tan, S. S. The evolving nature of banking, October 2013, TED responsible for over 5,000 employees across
Conferences, available at [Link]
ted-bcg/tan-su-shan-the-evolving-nature-of-banking. 23 Ratanjee, V. “DBS Bank: A Force For Good In Asia,” Gallup
22 Events, typically lasting several days, in which a large number Business Journal, October 1, 2013, available at [Link]
of people meet to engage in collaborative computer programming. com/businessjournal/164279/[Link].

June 2016 (15:2) | MIS Quarterly Executive 109

How DBS Bank Pursued a Digital Business Strategy

Figure 2: Reporting Structure for DBS’ Group Technology and Operations Division

the region. The new T&O structure was also Although DBS wanted to build a consistent
carefully aligned with the respective business technology platform across countries, the
lines and geographical markets, because the T&O reality was that Asian markets were diverse
teams needed to be “very, very close to business, (multicultural, multilingual) and at different
to add business value through technology.”24 stages of development. Hence, the technology
The T&O heads for the various lines of business platform had to be not just scalable but also
(e.g., consumer banking, institutional banking) flexible. Various configurable options were
reported to Mr. Gledhill, as did the respective necessary to meet specific country requirements.
country T&O heads (through the matrix reporting Investments were made to acquire configurable
lines shown in Figure 2). Each T&O team typically enterprise systems, to reverse-engineer and
comprised project managers, business analysts modernize the legacy systems, and to adopt
and system analysts dedicated to understanding service-oriented architecture and enterprise
the unique business line or local market application integration technologies.
requirements.
The first priority of the new T&O Division was “Our belief is to get to the back end, to sort
to rationalize and standardize the technology and out the pipes. This requires vast amounts
operations platforms. According to Mr. Gupta, of work in the back-end infrastructure,
many of the business processes and technology integration layers, messaging and all the
platforms needed to manage a regional bank associated innovations you need to make
were not yet in place: “Frankly, if you go around your architecture nimble. Getting the core
the countries, we do things differently in every right is where we really put our heavy spend.
place. We don’t even have consistent technology It will speed up the front end. We build
platforms across different countries. That is a world-class systems on top of that.” David
singular priority for us.”25 Gledhill, Head of Group T&O, DBS

24 David Gledhill, in an interview with the author, 2012. Sorting out back-end technology platforms
25 Wright, C. Euromoney: Piyush Gupta’s plans for DBS, Christ- required a careful development of DBS’ enterprise
Wright Media, September 2010, available at [Link]
architecture. Thus, the T&O teams worked closely
[Link]/euromoney-piyush-guptas-plans-for-dbs/.

110 MIS Quarterly Executive | June 2016 (15:2) [Link] | © 2016 University of Minnesota
 How DBS Bank Pursued a Digital Business Strategy

with their business counterparts to rationalize catering for different country-specific preferences
the range of banking applications needed to or different product-packaging features, such as
support their various operations. The changes tiered pricing, rebates and loyalty points.
needed were captured in a technology roadmap Another new enterprise-wide platform was
that showed the current state of standardization the wealth management system, which integrated
and the areas to be standardized going forward retail banking and private banking functionalities.
(see Figure 3). The technology roadmap was This platform was launched in 2011 and was
the cornerstone of a newly created, disciplined the first of its kind in Asia. It enabled a “wealth
process of engagement with business users to continuum” approach to better serve each
manage deviations. Every deviation had to be customer segment, targeting specifically the
justified with plans to realign in the future, and transition of customers from middle-class to high-
these deviations were logged, reviewed and end segments. This integrated banking platform
rejustified not just once but every year. facilitated a seamless customer experience. It
The result of these initiatives was that enabled retail customers with growing assets to
DBS’ new core banking system, Finacle, was access not just the retail banking platform (e.g.,
successfully deployed across 13 countries in to manage their checking accounts, credit cards,
28 months. The common operating platform funds transfer and mortgages) but also wealth
comprised a core banking suite of standardized management functionalities in private banking
applications, including trade, accounting to manage their growing assets (e.g., to manage
ledger, capital reporting, interfaces with their trading accounts, multi-currency deposits,
Internet banking and other channels. New investments in financial products, consolidated
functionalities in customer management and portfolio management). Building on a strong
liquidity management were also introduced. In regional base of affluent clients, DBS’ wealth
addition, the modernization of the legacy core management income doubled from S$506 million
banking systems in Singapore and Hong Kong in 2010 to S$1.1 billion in 2014.
also enabled rapid rollout of new products, such The wealth management system was quickly
as investment or insurance plans denominated followed in 2012 by IDEALTM 3.0—DBS’ Internet
in the Chinese currency (Yuan/RMB). The new and mobile banking platform for businesses.
operating platform allowed greater flexibility in IDEALTM offered corporate customers a

Figure 3: DBS’ Technology Roadmap

June 2016 (15:2) | MIS Quarterly Executive 111

How DBS Bank Pursued a Digital Business Strategy

customizable dashboard to manage cash and “Make sure that you define a project in
trade financial transactions via straight-through terms of solving a well-defined and clearly
processing, and access to consolidated statements sponsored business problem as opposed
and forex functions. Designed as a region-specific to implementing a piece of technology,
solution, IDEALTM incorporated each country’s measured purely in terms of on time, on
language and was seamlessly integrated with budget. Failure to do this will inevitably
each market’s core banking technology as well divide the IT and business teams, and it
as with the client’s business processes and would be suicidal for the project”.27 Paul
internal ERP systems. In 2014, IDEALTM handled Cobban, Head of Process Transformation,
53.8 million transactions and enquiries, and DBS
was accessed by 137,700 companies across 120
countries26
3. Design New Digitally Enabled
Although these technology platforms were
typically best-of-breed systems provided by Customer Experiences
external vendors, DBS recognized that a strong In 2010, as the digital platforms were
in-house competency in technology integration being put in place, DBS also set up a Customer
was critical for devising sound business solutions Experience Council, chaired by the CEO. Mr.
and for staying responsive to business demands. Cobban’s role was expanded, and he became the
As noted by Mr. Gledhill: “To be able to integrate Head of Customer Experience, as well as Head of
technology is a core (competency) in a firm. Process Transformation, reporting to the Head of
My option to choose best-in-class technology is Group T&O. The intention was to foster a mindset
probably right for a bank the size of DBS. So, my shift that would go beyond developing a culture of
real value proposition has been to develop good customer service excellence to creating a culture
technology integration expertise. We need that in- of digitally enabling new customer experiences.
house. We can’t be outsourcing our brain!” “Digital banking goes beyond creating
In addition, the T&O Division launched an mobile apps or enabling transactions. It is
“operational excellence” program to improve about leveraging world-class technology
the bank’s key processes. In 2010, Mr. Gupta to create a first-class customer experience.
hired a new head of process transformation, We have been very focused on executing
Paul Cobban, who was tasked with applying against our IT strategy to enable us to be
process improvement methods and lean more nimble and innovative in the ways we
principles across DBS. A result was the mandated engage our customers, including changing
requirement for all new T&O projects to undergo the way people bank.”28 David Gledhill,
process transformation with stretch targets and Head of Group T&O, DBS
measurement of outcomes. Cross-functional
teams, comprising 10 to 20 people from around Strategically, the design of new customer
the bank (including senior executives and new experiences was guided by a set of principles
hires), were tasked with driving these projects. from DBS’ Asian Service Framework, which
These process streamlining initiatives drew on the bank’s strong Asian heritage. This
resulted in S$60 million of savings in the framework incorporated core Asian values of
first year. Because of this early success, the “respect and humility”—i.e., “We are Respectful,
process improvement program was extended We are Easy and Dependable to bank with.”
organization wide, and all employees were
encouraged to contribute improvement ideas. By 27 Anderson, D. Q&A with Paul Cobban, Managing Director,
COO, Technology and Operations, DBS Bank, Forrester, August 23,
2013, DBS had eliminated over 240 million hours 2013, available at [Link]
of customer wait time. Another T&O initiative qa_with_paul_cobban_managing_director_coo_technology_and_op-
was to link the delivery of every project solution erations_dbs_bank. Note that Paul Cobban’s responsibilities have
expanded over the years, and more recently, he took on the role of
to real, measureable business outcomes, thus COO in DBS Bank.
avoiding the need to classify a project as either an 28 Choudhury, A. R. “Using IT to be nimble and innovative,” The
IT or a business project. Business Times, March 16, 2015, available at [Link]
[Link]/focus/in-depth/cio-speaks/using-it-to-be-nimble-and-
26 DBS Annual Report, 2014. innovative.

112 MIS Quarterly Executive | June 2016 (15:2) [Link] | © 2016 University of Minnesota
 How DBS Bank Pursued a Digital Business Strategy

The acronym of RED (Respectful, Easy and helped the bank to optimize its cash reloading
Dependable) translated into operational schedule at non-peak times.29 This helped DBS
principles that were the basis of DBS’ continuous to cut its ATM cash-outs by over 90%, while the
search for ways to enhance the experiences of its number of customers affected by cash reloading
customers. was reduced by 350,000 each year. The number
of trips required to reload the ATMs was also
“Spelling out RED, we define everything reduced by 10%, while the amount of leftover
we do from the cosmetic touch, feel and cash returned to the bank decreased by 30%.
look to real service propositions. We play
these behaviors or themes out in the way “Customer touchpoints such as ATMs—
we train the front-service officers, the way merely output channels previously—now
we design our products, the way we do became a customer sensor point for us,
process engineering, the way we design our delivering real-time information that can
systems. This is a RED attitude, this is a RED be used to form a bigger and better picture
product, this is a RED process. It is a real of customers and their needs.”30 Piyush
benchmark that everybody can get his head Gupta, CEO, DBS
around.” Paul Cobban, Head of Customer
Experience, DBS In 2012, DBS was also the first bank in
Singapore to implement speech analytics
A second focus was the better use of data technology at its call center, which handled over
to drive decisions in serving customers. DBS five million calls a year. Key phrases commonly
actively promoted a new evidence-based used by customers were highlighted by the
culture of managing by facts and numbers, analytics program, allowing the bank to identify
rather than just by intuitions or opinions. Key calls requiring longer handling times and
customer service concepts were developed and repeated calls from the same person, as well
operationalized, and the relevant statistics were as specific patterns in customer interactions.
then systematically collected and analyzed. For Identifying these key phrases enabled DBS to
instance, metrics such as customer hours saved better address customer needs and preempt
were formalized as strategic key performance their complaints. For example, from the key
indicators that management carefully tracked. phrases “cancel credit card” and “annual fee,” DBS
In one example, T&O analyzed the transaction deduced that customers tended to call in to cancel
statistics of its call centers and found that, out of credit cards when they were told they had to pay
the 86,000 touchpoints in a month, only 20,000 an annual fee.
captured information on why customers were
contacting the bank. As a consequence, T&O “We would never know that by sending out
started to track and analyze customer pain points a (request for payment of) membership fee,
in their transactions with DBS. The resulting it is creating calls to come in, and customers
improvements resulted in a 50% reduction of start to evaluate about whether they should
queue times and saved 100 million customer keep a card. It may not necessarily mean
hours. that we do not send out any more (requests
Another example of data optimization related for payment of) membership fees, but it
to ATMs. DBS’ ATMs had more features than means that we need to actively engage our
most other ATMs worldwide (including payment customers prior to the fee being levied, to
of bills and airline tickets), and these features engage them to use our card more often so
led to very high usage. DBS’ 1,100 ATMs in they automatically qualify for a waiver.”31
Singapore processed over 25 million transactions Lena Low, Head of Customer Call Centre,
a month, seven to eight times higher than the DBS
global average. By using analytics and sensors
29 DBS received the “Most Innovative Use of IT’ award in the
embedded in machine-to-machine (M2M) 2014 Singapore National Infocomm Awards.
communication of its ATM network, DBS was able 30 “Banking’s Technology Challenge,” The Business Times, May
to accurately predict ATM usage and customer 29, 2013, pp. 28-30.
31 Kwok, J. “DBS Call Center Finds Ways To Please Customers,”
withdrawal patterns for each machine, and this The Straits Times, August 23, 2012.

June 2016 (15:2) | MIS Quarterly Executive 113

How DBS Bank Pursued a Digital Business Strategy

As a result of such proactive interventions, Similarly, the design of DBS’ new branch model
DBS’ customer relationships improved, as evident showcased the intuitive integration of digital
by the 45% rise in compliments and 17% decline technologies for a new customer experience.
in complaints compared to the previous year. In these branches, customers were greeted by
Furthermore, the time required to meet each user DBS branch ambassadors at the entrance. The
request fell by 5%, which saved the bank about branch featured digital services such as iPads
107,000 staff hours a year. in the waiting area, virtual queuing, electronic
To reimagine how banking services could be forms and a separate Quick Serve Counter for
offered to its customers in the digitally enabled non-cash transactions that could be completed
context, DBS actively incorporated human- within 15 minutes. In particular, the specially
centered design thinking into its customer designed Consultation Pods (workstations) used
analysis efforts. A customer journey design technology to enable the bank’s staff to focus on
laboratory was established in 2013 to put DBS the customer:
staff in the customers’ shoes as they learned
to map the customer experiences and seek to “What we’ve built into these pods is enough
understand issues encountered by customers technology so 95% of the interaction can
across multiple touchpoints. be done without the [staff member] leaving
their seat. That’s where the technology
“… we look at the journeys our customers comes in, but we actually hide it away.
are taking and then we try and get inside It’s kind of hidden behind the teller, and
the mind of the customer, feel like we are it’s something the customer doesn’t see.”33
the customer. We actually create a pretend David Gledhill, Head of Group T&O,
customer that represents our base. We give DBS
them a name and age and occupation, and
then we take them through the journey as
“Digital is all about making what can be
they apply for a mortgage or a credit card,
seen unseen—making services so smooth
and we try to understand what they are
and seamless that it becomes invisible to the
going through. We consider what they are
customer.”34 Neal Cross, Chief Innovation
thinking, what are their emotions, what is
Officer, DBS
their experience, what are they concerned
about, and then try and improve that In early 2015, DBS was the first bank in
process so their journey is more joyful.”32 Singapore to introduce an SMS ‘Q’ service,
Neal Cross, Chief Innovation Officer, DBS where customers could obtain a queue number
and the estimated wait time via SMS prior to a
For example, after observing that its customers
branch visit. As this freed up customers’ time,
spent a total of 15,000 hours a month at ATMs
they became more amenable to speaking with
viewing account balances, DBS launched an
staff, resulting in double-digit sales growth for
SMS-based banking service in 2014 so that
bancassurance35 and investment products at the
customers could carry out basic transactions,
branches.36
including checking balances, paying card bills
and transferring funds to their own accounts. 4. Incubate and Accelerate Emerging
For the convenience of its customers, DBS also Digital Innovations
added alternative banking touchpoints as more In 2010, DBS established an Innovation
transactions occurred outside traditional bank Council chaired by the CEO to provide a
branches—e.g., through self-service kiosks
and digital partnerships (e.g., with Guardian 33 Fitzgerald, M. “DBS Bank Pumps Up the Volume on its Tech-
nology,” MIT Sloan Management Review, January 6, 2014.
Pharmacies, Sheng Siong supermarkets, 7-Eleven
34 Cross, N. “What’s Your Definition of ‘Digital’ in Banking?,” The
stores and SingPost outlets). Financial Brand, July 22, 2014.
35 Bancassurance is an arrangement in which a bank and an insur-
32 Paperny, D. Agile startups know their customers: DBS Chief ance company form a partnership so that the insurance company can
Innovation Officer, Neal Cross, Future & Innovation Series, February sell its products to the bank’s client base.
18, 2015, available at [Link] 36 Boon, R. “Need for banks to boost tech to engage clients,” The
customers-dbs-chief-innovation-officer-neal-cross/. Straits Times, March 27, 2015.

114 MIS Quarterly Executive | June 2016 (15:2) [Link] | © 2016 University of Minnesota
 How DBS Bank Pursued a Digital Business Strategy

dedicated focus on leveraging the digital edge innovation. DBS’ key markets in Singapore and
for reinventing itself. A Chief Innovation Officer Hong Kong had high smartphone penetration and
was head-hunted to lead a new Innovation Office, were excellent test-beds for the suite of 19 mobile
coordinate the various innovation efforts in DBS apps that the bank had developed. These apps
and standardize on a common methodology or provided customers with more features for share
language for innovation. The Chief Innovation trading, insurance purchase, home search, virtual
Officer also reported to the Head of Group T&O to credit card payment and mobile point-of-sale.
ensure that experimentation and the incubation Notably, DBS PayLah!—a mobile wallet for
of innovative ideas would leverage new digital peer-to-peer fund transfers among DBS account
possibilities and align well with current digital holders via smartphones—was a strategic
initiatives. response to the emergence of mobile peer-to-
To foster greater innovations internally, peer payment services that sought to cut out the
several human resource initiatives were initiated, banks’ role as middlemen in payment services.
including innovation training workshops for Launched in 2014, DBS PayLah! attracted over
staff, and profiling and recruiting people with 5,000 users within a week, making it the top
strong “innovation potential” (for example, based finance app in the Singapore iTunes store. Users
on ideation competence, future-orientation). grew to 200,000 in six months.
Examples of successful innovations were DBS’ mobile banking platform also grew
compiled and circulated throughout DBS as a exponentially, from 225,000 users when it was
way of boosting employees’ confidence in putting launched in 2010 to 1 million users in 2014.
forward innovation ideas. “Being innovative” and By 2014, the number of transactions made
“a catalyst for change” also became key criteria via the Internet and mobile apps each month
for being considered for promotion. had reached over 24 million and 11 million,
DBS also began crowdsourcing innovative respectively.37 DBS’ mobile apps strategy was
ideas from its employees. For example, named as the world’s best in 2013-2014 by Swiss
uGOiGO™ was an online time deposit group- Research firm MyPrivateBanking.
buy campaign started by a group of employees As well as developing these creative solutions
at DBS Hong Kong in 2013. The campaign internally, DBS also sought external partnerships
targeted affluent customers using social media. in developing its innovation ecosystem.
More attractive tiered interest rates for time
deposits were triggered once the deposit “We don’t have all the smart ideas as we start
amounts hit specific targets. The new product to evolve our thinking about what banking
launch was a tremendous success. The uGOiGO is. This idea of outreach [helps us] to figure
microsite generated over 64,000 page views, and out what’s going on in the world, brings
acquisition of new customers by DBS Treasures smart ideas into the company, [which we
(the bank’s wealth management arm) grew 147 use] to change the way people are thinking
times more compared to the traditional means about banking inside the organization. [We
of customer acquisition. Total new deposits get] some really great ideas that we can
exceeded the original goal by 80%, with many of leverage. It is really starting to give us some
the customers being new to DBS. The viral effect huge momentum in DBS.” David Gledhill,
of the group-buy campaign was so effective that Head of Group T&O, DBS
the idea was quickly trademarked and replicated
By working with established research
across the region. In Singapore, the campaign met
institutions (e.g., universities) and technology
its 100% target in just five days.
partners (e.g., SAS, IBM Watson), DBS sought
Innovative ideas were also sought internally
to harness external expertise and know-how to
at the strategic level. Specifically, the Innovation
accelerate the rate of its digital innovation. For
Council identified areas with high-disruptive
example, DBS exploited big data through IBM’s
potential for systematic incubation. Mobile
Watson cognitive computing technology, which
banking and digital payment, along with
was deployed in its Wealth Management Division
analytics, SME banking, wealth management and
others, were areas of strategic focus for digital
37 DBS Annual Report, 2014.

June 2016 (15:2) | MIS Quarterly Executive 115

How DBS Bank Pursued a Digital Business Strategy

and subsequently rolled out to other business to such disruptions if necessary. An example of
lines. The Watson Engagement Advisor solution an innovative banking model is BBVA, a large
used artificial intelligence to glean insights on Spanish bank, which has begun to expose its key
market research and transactional behaviors in banking services to outsiders to encourage others
guiding relationship managers to offer advice to develop innovative banking apps. BBVA’s
tailored to a client’s risk appetite and desirable aim is to become a banking industry platform
investment portfolio. Another collaboration was player (i.e., to provide the architectural platform
with Singapore’s A*STAR Institute for Infocomm for banking apps).39 In the same way, DBS had
Research, which has over 600 scientists and developed about 150 different APIs (application
engineers, to further develop the bank’s analytics programming interfaces) that were ready to be
capabilities so it could deepen its understanding opened up to developers of new banking apps. It
of customer “footprints” and thus provide more was building a new digital front end that would
personalized interactions. connect to about 20 different ecosystem partners
In addition, DBS cast the net wide for so those partners could build products on top of
innovation ideas by actively engaging the DBS’ existing banking platform.
tech start-up community through accelerator
programs such as Startupbootcamp FinTech. Benefits Gained from DBS Bank’s
Digital Business Strategy
“The DBS hackathon is now a regular The substantial investment in technology as
part of the DBS training curriculum; we a foundation for growth appeared to have paid
were looking to break the stereotypes that off for DBS. In 2014, the bank delivered its 22nd
define banks. We wanted to revolutionize consecutive quarter of year-on-year growth, and
the way we trained our people so that its income and earnings reached a record S$9.62
they would embrace a digital mindset. billion and S$4.05 billion respectively, with net
We sought to foster a cultural exchange profit crossing the S$4 billion mark for the first
between our employees and startups. We time. DBS’ share price also rose from S$11.48
created a “sandbox” for our people to during the financial crisis in 2009 to a high of
experiment like startups, to identify and act S$20.60 in 2014.40 In addition, the stable growth
on opportunities quickly.” Neal Cross, Chief enabled by the robust technology infrastructure
Innovation Officer, DBS has led to DBS being recognized as one of the
world’s strongest41 and best-capitalized banks,
Referring to DBS’ willingness to experiment
with “AA-” and “Aa1” credit ratings that were
and its “fail fast, learn fast” innovation philosophy,
among the highest in Asia-Pacific. It had also
Neal Cross elaborated: “We need to fundamentally
received a range of accolades, including being
educate the bank in another way. We experiment—
named “Safest Bank in Asia” for six consecutive
try things quickly—so we start to act a bit more
years to 2014, the “Best Bank in Asia-Pacific”
like a startup, like an e-commerce company. It is
and the most valuable bank brand in ASEAN.42 In
about taking small, calculated risks that have no
2014, DBS was ranked Asia’s third-largest trade
impact if they fail. This year we are running 1,000
finance bank by market share, after global banks
small experiments across the bank, and they will be
HSBC and Citigroup.43 Additionally, DBS was the
exactly that, small things we can test in safety that
only Asian bank among the top 10 private banks
give us a huge amount of insight into action.”38
DBS saw such experimentations as a way of 39 BBVA has made its API available through its BBVA Developer
Center site, available at [Link]
getting itself ready for the future—i.e., of catching platform/home.
a glimpse on how future banking models might 40 DBS Annual Report, 2014.
look and building the bank’s readiness to respond 41 DBS was ranked the 7th strongest bank globally in 2014 by
Bloomberg.
42 Association of Southeast Asian Nations (ASEAN) is made up of
38 Wheatcroft, C. “Digital is a spectrum - at one end it’s about 10 member countries: Brunei, Cambodia, Indonesia, Laos, Malaysia,
improving presence but at the other it’s reinvention,” The Asian Myanmar, the Philippines, Singapore, Thailand and Vietnam.
Banker, February 24, 2015, available at [Link] 43 McCabe, T. Asia Transaction Banking Delivering Sustain-
com/updates-and-articles/%E2%80%9Cdigital-is-a-spectrum-at-one- able Returns, DBS, March 27, 2014, available at [Link]
end-it%E2%80%99s-about-improving-presence-but-at-the-other- com/iwov-resources/pdf/investor/other-materials/2014/2014-0327_
it%E2%80%99s-reinvention%E2%80%9D. [Link].

116 MIS Quarterly Executive | June 2016 (15:2) [Link] | © 2016 University of Minnesota
 How DBS Bank Pursued a Digital Business Strategy

in Asia, in an industry dominated by global wealth (see Figure 2 earlier). Similarly, new processes
managers including UBS, Citigroup and Credit needed to be institutionalized and supported with
Suisse.44 the relevant technology to ensure the changes
were implemented enterprise wide. The hardest
Key Lessons Learned from capability to build was the mindset change
Pursuing a Digital Business needed. This was the area that DBS spent the
most time and effort developing.
Strategy Drawing from the transformation experience
The DBS case describes its digital of DBS, we have identified four key lessons
transformation in response to rising demands for organizations aspiring to pursue a digital
of digitally savvy customers and the threats of business strategy.
fintech disruptions. Led by its visionary CEO, DBS
invested heavily in technology as a competitive 1. A Digital Business Strategy Demands
enabler and successfully undertook radical Strong Leadership
organizational changes to “rewire” the entire DBS’ journey suggests that the pursuit of a
enterprise for digital innovation. The case shows digital business strategy is not a project, nor
how, over the course of its transformation, DBS the job or responsibility of a specific “digital”
gradually built up the necessary capabilities department or IT division, but is a core belief
to pursue a successful digital business that needs to pervade the entire enterprise.
strategy: cultivating the leadership for digital Specifically, the senior leadership in DBS and
transformation, developing agile and scalable the management structure put in place played a
digital operations, designing new digitally key role in creating the digital mindset that is a
enabled customer experiences, and incubating prerequisite for fusing business and technology
and accelerating emerging digital innovations. strategies. This was evident in the deep
These capabilities dynamically complemented commitment of the visionary CEO, the inclusion
each other, with the new digital leadership of the Head of Group T&O as a key member of
providing both the impetus to transform and the central executive committee, and a team of
the resolve to develop the enterprise digital transformed senior business executives who
platforms on which new digitally enabled are now “digital warriors” championing digital
customer experiences were designed. At the innovation in their respective business domains.
same time, new innovation capabilities were The convergence of various reporting lines was
gradually developed through strategic incubation, also crucial in that it allowed the underlying
technology partnering and mindset change. tensions between exploring and exploiting to
The building of each capability was not a one- surface and be dealt with at the strategic level—
time initiative but required a full organizational an ambidextrous skill that leaders driving digital
approach to “rewire” the related structure, transformation must develop.
process, technology and people elements (see
Table 1). Changes to the structure, for example, 2. An Agile and Scalable “Core” Is
were radical because they needed new senior Critical
executives to be appointed, departments to be DBS’ digital transformation journey
merged, strategic external talents to be hired highlights the importance of building an agile
and changes to formal reporting relationships. and scalable digital infrastructure. Such an
In fact, the convergence of various reporting infrastructure enables organizations to capture
lines says a lot about the strategic emphasis the value of digitalization. DBS invested heavily
DBS placed on the role of digital innovation. and continuously to build a modular and
The line of business T&O, country T&O, process agile technology infrastructure that enables
transformation, customer experience and subsequent scalability of new initiatives (e.g., a
innovation were brought together under the configurable core banking system, online/mobile
Head of Group T&O, and ultimately under the CEO banking platforms, straight-through processing,
service-oriented architecture, data centers).
44 Vallikappen, S. “UBS Retains Top Spot Among Wealth Manag- The ability to digitize best practices and quickly
ers in Asia,” Bloomberg, October 17, 2014.

June 2016 (15:2) | MIS Quarterly Executive 117

How DBS Bank Pursued a Digital Business Strategy

Table 1: Digital Capabilities and the Related Organizational Elements

Cultivating Leadership Developing Agile and Scal- Designing New Digi- Incubating and
for Digital able Digital tally Enabled Accelerating Emerging
Transformation Operations Customer Experiences Digital Innovations
• Visionary CEO • Newly merged technolo- • New head of cus- • New head of in-
gy and operations (T&O) tomer experience novation
• CIO in senior
executive team and • Structural T&O align- • Customer experi- • Innovation council
reporting to CEO ment to business divi- ence council
• Innovation office
sions and geographical
Structure • Convergence of • Customer experi-
markets
reporting to CIO ence office
• New head of process
transformation
• Process transformation
office
• IT investment • Process streamlining, • Development • New training,
prioritization rationalization, consoli- and diffusion of recruitment, assess-
dation, improvement customer service ment, promotion
• Enterprise gover-
framework
nance and coordi- • Enterprise architecting • Strategic incu-
nation • Human-centered bation, internal
Process • Technology integration
design crowdsourcing,
• Technology road- competency development
hackathons
mapping work- • Customer journey
shops lab • Technology partner-
ing and start-up
collaboration
• Unified communi- • Internet banking • New branch model • Emerging technolo-
cation platform gies (e.g., mobile,
• Mobile banking • Call centers with
payment, analytics,
• Enterprise portal voice analytics
• Configurable core bank- social media)
• Collaborative ing system • Data-drive ncus-
• Disruptive fintech
Technology platform tomer analytics
• Modernized legacy technologies (e.g.,
systems crowdfunding,
P2P lending, social
• Enterprise application trading)
integration (EAI) tech-
nologies
• Digital thinking • Continuous process • Customer service • Innovative, inven-
among business improvement, and lean mindset (RED) tive entrepreneurial
executives, moving thinking focusing on total start-up-like think-
People
from “tech-idiots” customer experi- ing
to “digital war- ence
riors”
deploy them enabled DBS to respond swiftly to banking. We … are spending billions of
changing and new customer needs. The robust dollars in digitizing the bank. Less than
digital platforms also provided the basis for 10% of it is in the front end apps; 90% of
subsequent connections to new or innovative it is in digitizing the middle and the back.
apps through plug-and-play linkages using APIs How do you digitize the back end and create
and web services. The ability to rapidly scale up middleware around it that allows seamless
and down its digital infrastructure was a strategic connectors and connectivity into the front
capability that contributed to the success of DBS. end?”45 Piyush Gupta, CEO, DBS

“Until banks can completely change and 45 Tan, N. “Singapore well-poised to build vibrant FinTech sector:
Industry Players,” Channel News Asia, May 6, 2015, available at
enable the back end to allow digital instant
[Link]
fulfillment, you will not get through digital pore-well-poised-to/[Link].

118 MIS Quarterly Executive | June 2016 (15:2) [Link] | © 2016 University of Minnesota
 How DBS Bank Pursued a Digital Business Strategy

As noted by DBS’ Head of Group T&O, the Alipay’s online investment fund, Yu’E Bao, for
real value of T&O was its strong competency example, attracted US$92 billion in deposits from
in technology integration, which helped in over 100 million users, making it the world’s
devising sound business solutions on top of the fourth-largest money market fund in its first year
core architecture. These solutions were needed of operation.46
to enable DBS to respond to dynamic business Weill and Woerner have highlighted the need
demands and new digital innovations. for banks to search for new sources of value in
the emerging digital ecosystem.47 If they don’t,
3. A Digital Business Strategy Exploits say Weill and Woerner, they risk being relegated
Information Abundance to Create New to mere providers of highly regulated, back-
Value for Customers end transaction processing and commoditized
The pursuit of a digital business strategy services, and their customers will increasingly
requires organizations to strategically leverage look to companies such as Apple, Google or
their increasing abundance of digital information. Alibaba to meet their financial needs. Although
DBS actively directed the exploitation of data that extreme scenario is possible, there is not yet
from its digital platforms to create new customer any clear sign of who will emerge as the winners
experiences. Its focus on customers was strong. and losers in the digital shake-up of the financial
industry. Hence, navigating the dynamic digital
“I am very passionate that we forget banking innovation landscape to find new sources
about the fact that we have products and of value is certainly no easy task.
services to sell, and instead focus on what But the uncertainty did not stop DBS from
the customers are trying to achieve in their its various efforts in experimenting with new
lives and then see how we can integrate banking models (e.g., internal crowdsourcing
that with financial services.” Neal Cross, of ideas, customer experience labs, hackathons,
Chief Innovation Officer, DBS external partnering, nurturing of fintech
The continuous focus on customer needs startups).
and the related data analysis led to some long- “I am looking for things to power the digital
held customer assumptions being rejected. For bank as we build it up in the region. What
example, DBS found that wealthy Asian clients innovation can we bring to that? I hope
were more digitally savvy than in other parts of to find startups that can plug into that
the world, preferring digital contact over direct strategy.” Neal Cross, Chief Innovation
contact. As noted by the Chief Innovation Officer, Officer, DBS
“For a long time, there was a belief in the market
that billionaires would be less tech savvy than Technology scanning and experimentation
affluent clients, which has proven [to be] totally were necessary to better prepare DBS for
wrong.” This realization led to DBS launching dealing with the digital disruptions that fintech
a digital wealth management platform for its developments might bring. These explorations
customers. essentially created strategic options for the future
so that DBS would be able to adapt dynamically
4. A Digital Business Strategy when the opportunities or threats arose. DBS
Requires the Continuous Navigation Paylah!, for example, was a strategic response to
of the Dynamic and Emerging Digital the emergence of mobile peer-to-peer payment
Landscape services that sought to cut out banks as the
The dynamic responses of DBS as it responded middlemen.
to the various sources of digital disruptions
highlight the need for continuous navigation of
the dynamic digital landscape. Non-traditional 46 Aligning the Financial Systems in the Asia Pacific Region to
players encroaching into the banking space in Sustainable Development, United Nations Environment Programme,
Asia include PayPal, WeBank (backed by Chinese 2014, available at [Link]
Publications/2015/Unep-Inquiry_Asia_Finance_Final.pdf.
social media company Tencent) and Alipay 47 Weill, P. and Woerner, S. L. “Thriving in an Increasingly Digital
(Alibaba’s third-party online payment service). Ecosystem,” MIT Sloan Management Review (56:4), 2015, pp. 26-35.

June 2016 (15:2) | MIS Quarterly Executive 119

How DBS Bank Pursued a Digital Business Strategy

At the same time, by assessing such potential ●● Which parts should we seek to
threats, DBS gained greater clarity about its acquire new capabilities for (e.g., DBS’
unique strengths and resources (e.g., financial participation in the community of fintech
strength, skills and knowledge, brand equity, startups)?
banking network, technology platforms and its ●● Which part should we strategically lag as a
Asian heritage) that would position itself well vis- late adopter (e.g., uncertain developments
à-vis potential disruptors. in bitcoins).
“There’s nothing that a tech company can
do that I can’t, and I can do things they Concluding Comments
can’t. Banks have innate advantages that DBS’ digital transformation journey highlights
others don’t, such as banking expertise, the key capabilities that an organization needs
robust networks and infrastructure, and to build so it can pursue a digital business
established risk management frameworks, strategy. For many organizations, pursuing such
to name a few. None of the fintechs, for a strategy is now a business imperative because
instance, has fully integrated access to a the threats and opportunities from digital
market trading platform. If we can marry disruptions are fast becoming a reality. Hence,
these strengths with the agility, customer- there is greater urgency to “rewire” or transform
centricity and inventiveness of fintech, there traditional enterprises so they can accommodate
is no reason we cannot carve out a befitting digital innovation. Senior executives must ask
space for ourselves in the new world order.” themselves these questions:
Piyush Gupta, CEO, DBS 1. To what extent does the organization have
Hence, organizations aspiring to pursue a the required digital capabilities to counter
digital business strategy need to be prepared to the threats or exploit the opportunities
continuously navigate the dynamic and emerging from digital disruptions?
digital landscape. They need to assess how • To what extent have the leadership
quickly and on what scale disruptive innovations skills required for digital
are likely to occur, and devise strategic responses transformation been cultivated among
to cope with dynamic shifts. This requires the the senior executives?
willingness to experiment and explore new digital • To what extent has the organization
frontiers to create strategic options for the future. developed agile and scalable
It also requires subjecting the organization to digital operations to respond to the
strategic (but uncomfortable) conversations to dynamism of the digital era?
clarify its core competencies and unique assets.
However, a digital business strategy cannot • To what extent has the organization
be conceived independently of the business leveraged its abundance of data to
ecosystem the organization is in. In the banking design new digitally enabled customer
sector, organizations need to develop clarity experiences?
about the new sources of value creation in the • To what extent has the organization
banking ecosystem and find ways to capture that accelerated the pace of innovation
value. Thus, banks need to ask themselves: and incubated emerging digital
●● Which parts of the business should we innovations?
keep in-house and at the forefront of 2. What can the organization do to
innovation (e.g., P2P payment as in DBS develop its digital capabilities further
Paylah!)? by overhauling the related elements in
●● Which parts should we collaborate structure, process, technology and people?
with strategic partners on (e.g., DBS’ Given the state of flux in the digital landscape
collaboration with IBM Watson for data and the related competitive dynamics, definitive
analytics)? answers to these questions are far from obvious.
However, initiating the process of seeking

120 MIS Quarterly Executive | June 2016 (15:2) [Link] | © 2016 University of Minnesota
 How DBS Bank Pursued a Digital Business Strategy

answers is a sensible first step in the pursuit of the management of complex, enterprise-
a digital business strategy. Adopting the lessons wide IT projects, and electronic marketplaces.
gained from DBS’ experiences should mean that Her research has been published in top IT
the journey of digital transformation will be as management journals, including MIS Quarterly,
rewarding as the strategic outcomes achieved at MIS Quarterly Executive, Communications of the
the end. ACM, European Journal of Information Systems,
Journal of Strategic Information Systems and
Appendix: Research Methodology Journal of Information Technology. She is a senior
editor at the Journal of Strategic Information
We conducted an intensive case study of Systems and is on the editorial board of
DBS’ digital transformation journey, focusing Information and Organization.
on how it perceived threats and opportunities
of digital disruptions and how it built up the Peter Weill
required capabilities to aggressively pursue its Peter Weill (pweill@[Link]) is Chairman,
digital business strategy. In addition to news MIT Sloan Center for Information Systems
articles, annual reports, published statements Research (CISR) and Senior Research Scientist at
on its websites, presentation slides and videos, MIT Sloan School of Management. He researches
we interviewed senior business and technology the role, value and governance of digitalization.
executives in DBS who were actively involved in He is a popular presenter to executive audiences
the transformation. A total of 12 interviews were and has published widely, including award-
conducted from late 2011 to early 2015. winning books, case studies and journal articles.
His work has appeared in Harvard Business
Review, Sloan Management Review and The Wall
About the Authors
Street Journal. Weill has co-authored five books
Siew Kien Sia published by Harvard Business School Press,
Siew Kien Sia (asksia@[Link]) is Director including his latest book, IT Savvy: What top
of the Information Management Research executives must know to go from pain to gain. In
Centre (IMARC) and Associate Professor of 2008, Ziff-Davis and [Link] recognized him
Information Systems at the Nanyang Business as No. 24 in the “Top 100 Most Influential People
School, Nanyang Technological University, in IT” and as the highest-ranking academic.
Singapore. His main research interests are in
process redesign, enterprise systems, enterprise
integration, complex organization design and the
development of digital capabilities. He has over
20 years of research and consulting experience in
private- and public-sector organizations and has
published widely in international journals, such
as MIS Quarterly, Journal of MIS, Journal of AIS,
Decision Sciences, Communications of the ACM and
MIS Quarterly Executive.

Christina Soh
Christina Soh (acsoh@[Link]) is a
professor and head of the Division of IT and
Operations Management at the Nanyang Business
School, Nanyang Technological University. She
received her Ph.D. from the Anderson Graduate
School of Management, University of California,
Los Angeles. Her areas of research include
the management of IT resources in global
enterprises, strategy and technology innovation,

June 2016 (15:2) | MIS Quarterly Executive 121