Category winner: Rewiring the Enterprise for Digital
Innovation: The Case of DBS Bank
Who – the protagonist
Piyush Gupta, appointed CEO of DBS Bank in 2009 after 27 years with Citigroup.
DBS was recognised as one of the world’s strongest and best capitalised banks, with excellent credit ratings that were among the highest in the Asia-Pacific region. It had also received a number of accolades, including ‘Safest Bank in Asia’ for six consecutive years. It even replaced the iconic Singapore Airlines to become the country’s most valuable brand. In July 2016, it was also named World's Best Digital Bank at the prestigious Euromoney Awards for Excellence.
Piyush was tasked to leverage digital technology, not just as an infrastructure platform for growth, but also to accelerate the pace of banking innovation for increasingly tech-savvy Asian consumers. DBS spent S$600 million annually on technology, including mobile banking platforms. In 2014, Piyush announced a further investment of S$200 million over three years to further develop the bank’s digital capabilities.
DBS was established by the Singapore government in 1968.
Originally a Singapore bank, DBS grew to become the largest bank (by assets) in Southeast Asia. In 2014, its network centred on three key Asian axes of growth: Greater China, Southeast Asia and South Asia. It had over 280 branches across 18 countries.
‘Whether we know it or not, the digital revolution has put banks under siege. With Internet 2.0 and mobility, the game has been redefined. Banks in Asia are on a burning platform of competition from mobile and Internet companies. If we don’t embrace digital – and quickly – there is a real danger that our lunch will be eaten. After all, my firm belief is that in the future people won’t need a bank, they need banking.’ – Piyush Gupta
Has DBS done enough to put digital at the heart of banking? Can it systematically assess the opportunities and threats of digital disruption in the banking industry and devise a set of possible strategic responses? Will it be able to remain at the forefront of digital innovation to become the Asian ‘bank of choice for the new Asia’?
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Sia Siew Kien, Christina Soh, Peter Weill and Yvonne Chong
The authors discuss the need for a visionary perspective and how the protagonist in this case achieved so much.
It’s a great honour to be recognised by The Case Centre for this award. We are delighted that others have found the digital innovation journey of DBS Bank to be interesting.
Unique discussion points
The unique discussion points to note in this case are how DBS Bank is able to pursue a digital business strategy (by fusing their business and IT strategies), how it develops and rewires the critical infrastructures for change, and how it tries to inject entrepreneurship in accelerating its innovation cycles.
DBS Bank uses the word ‘rewiring’ as the transformation is about future-capabilities building – both in the technology platforms, organisational structures/processes, and their people’s mindset. The benefits of such ‘rewiring’ are often not obvious in the short term (typically unseen as in the hidden wires in physical buildings).
You need a more visionary perspective to see the need and be willing to commit to such costly rewiring. This visionary perspective is what the CEO Piyush has provided as an impetus for change.
Urgency for change
Piyush has continually articulated the urgency for change, but he also recognises that he cannot deal with all the problems and opportunities in the dynamic ‘fintech’ innovation landscape. Hence, he actively pushes the innovation agenda at all levels of the organisation, even bringing outside tech-startup entrepreneurs to work with internal managers on ‘hackathons’ or joint projects.
People can get complacent with their successes over the years. Breaking this sense of complacency to encourage people to experiment and innovate with fresh ideas is what Piyush hopes to achieve in DBS Bank. The lessons learnt here can also be applied more widely. Digital disruptions are happening across many industries.
Competing and collaborating
This case offers a great opportunity to discuss the new competitive and cooperative dynamics within the fintech disruption. New players will emerge; existing incumbents will need to respond. Knowing where and when to compete (for example, cannibalising traditional revenue streams to pre-empt new competitors) and where and who to collaborate with can be discussed in greater depth.
About the authors
Peter Weill is Senior Research Scientist and Chairman at MIT Sloan's Center for Information Systems Research (CISR).
Yvonne Chong is Assistant Director at the Asian Business Case Centre, Nanyang Business School, NTU.