A Blueprint for Digital Transformation in Finance

DBS Bank is Southeast Asia’s largest bank, operating in 19 markets worldwide. DBS is widely recognized in the banking industry for value creation through digital transformation and has been named World’s Best Digital Bank and World’s Best Bank multiple times.

For banks, digital transformation means an operational and cultural transformation that integrates digital technologies into all bank functions, fundamentally enhancing banking operations and customer value proposition. In the face of the disruption wrought by FinTech and evolving customer expectations, not all banks can claim transformational success, even if digital transformation is necessary for long-term survival.

Digital transformation in the financial sector is the most difficult due to strict regulations. End customer request is 21^cent With the experience of the century, companies have to balance the risk of doing the wrong thing even once until regulators start swarming.

I recently had the opportunity to speak with Nimish Panchmatia, Chief Data & Transformation Officer at DBS Bank, and learned why Singapore banks have become the ‘poster child’ of digital transformation. in the banking industry.

A strong leader in digital transformation

In speaking with many companies across multiple industries, I have found leadership at the top of the organization to be a critical enabler for successful digital transformation. Executives must consistently communicate their transformational vision and encourage organizational participation. The title may not necessarily be Chief Transformation and Data Officer, but a strong leader should play a role in overseeing the execution of strategy. This position is critical for banks, which are typically multi-line organizations, each with its own priorities.

Panchimatia looks three to five years into the future in its role. For example, looking back five years, blockchain, 5G, and the Internet of Things (IoT) were areas of focus. Now, his team’s focus has expanded to generative AI and digital twins, but he’s still waiting for 5G to roll out.

Panchmatia said: “We need to decipher what technology means for organizations. Where does the organization need to be to prevent the unexpected from happening? , are you technology ready?” Once the impact is understood, focus on creating a holistic transformation program that encompasses people, culture and technology.

Panchmatia has a team tasked with assembling learning programs to teach new skill sets and prepare for change. Panchmatia said, “Preparation is about the organization, the way people work, the new skills people need, the environment people need, and what that means in terms of the customer journey and experience. etc.,” he said.

Data drives everything. DBS has a central team called DataFirst, tasked with bringing together all the data, tools and skills needed to serve the organization. The team uses analytics, AI, and machine learning (ML) to innovate to the next level, tackling use cases that make a difference for customers, businesses, and employees.

The transformation process never ends

The real key to success is understanding that the transformation process is never-ending. Individual initiatives may have set schedules, but they should all contribute to ongoing organizational discipline.

In 2021, DBS revamped its vision from ‘The World’s Best Bank’ to ‘The Best Bank for a Better World’, with a singular focus on its journey. This is a journey with no stop signs anywhere, but executives and employees alike understand that it is an ever-evolving journey.

Panchimatia noted that it is not just the company’s top people who are talking about becoming “the best bank for a better world.” This means something important for anyone who processes credit cards or interacts with customers in branches or call centers. All employees should understand the program and its messages.otherwise it’s just a fancy word.

DBS and Infosys Finacle — disconnecting the mainframe

It is instructive to delve deeper into examples of digital transformation projects that have delivered results for banks. Ten years ago, DBS was on the mainframe in a completely outsourced fashion. This technology was operated by the vendor’s employees. Everything was proprietary, with millions of dollars being paid annually for database and mainframe licenses.

DBS recognized that the world was changing, and CEO Piyush Gupta called on the organization to come up with a plan to move away from the mainframe. One of his first tasks was to list all relevant applications and other technologies and classify them into one of three categories, which he decommissioned, invested in, or retained. The second big decision was to move from a model of fully outsourcing employees to one in which DBS manages the technology agenda. The rationale is that technology is the biggest driver of digital companies, so it’s better to keep the expertise in-house. The third thing the bank did for him was talk to other companies that were already on their transformational journey to see what was possible.

At this point DBS got involved Infosys offers several application solutions that can potentially replace mainframe core banking. These include solutions that support banking, wealth management and liquidity management, to name a few.

DBS has also worked with Infosys on many significant transformations. For one, DBS chose Infosys Finacle, a cloud-enabled API solution, as the open and flexible core platform for its operations across 13 markets. The second was to launch digibank, a mobile-only bank in markets such as India and Indonesia, providing customers with an easy, convenient and secure way to bank on the go.

Three Key Success Factors for Digital Transformation

Three key factors were crucial when DBS began its digital transformation. One is to digitize thoroughly. For DBS, ‘digital to the core’ means having a strong foundation of core systems and common platforms across all locations. In practice, this means investing in cloud infrastructure, redesigning applications to be cloud-ready, becoming more data-driven, and integrating AI/ML capabilities.

The second component was instilling a customer journey mindset throughout the organization. This meant putting the company at the forefront of digital banking by providing customers with cutting-edge digital financial services.

The third component was changing the culture of the company to operate with the energy and agility of a startup. It’s not easy, but it’s worth creating a culture that embraces experimentation and innovation while ensuring every employee has the necessary skill sets so no one is left behind.

summary

The transformation process is never-ending and DBS will continue to bet on new technologies. With digitization becoming a key challenge for many banks, DBS continues to invest in at least three areas that create further differentiation.

The first is the integration of AI/ML and data analytics. These include use cases that span customer-facing businesses such as consumer banks and small business banks, as well as support functions such as legal, compliance, and human resources.

The second is an ecosystem strategy enabled by an API suite. This allows you to win new business without customer acquisition costs through partnerships with companies like ByteDance, Ctrip, Home Credit and Kredivo.

The third is DBS’ ongoing commitment to developing an agile workforce that supports a startup-style culture.

The DBS story shows what a truly future-proof business looks like. At this point, DBS is much more than just a tech-friendly bank. It would be more appropriate to recognize it as a technology company with a banking license.