How DBS Bank Became The Best Digital Bank In The World By Becoming Invisible
By Jason Bloomberg for Forbes
Every year, financial services magazine Euromoney gives out numerous awards for excellence to firms in many categories, at country, regional, and global levels. Their inaugural pick for best digital bank: Singapore-based DBS Bank.
DBS wasn’t always a digital leader, however. The story of its digital transformation is all the more remarkable because one of its goals for its technology – in fact, for the entire bank – is to disappear from view.
First Step: Eliminate ‘Waste’
DBS is a midsized Asian bank with about 22,000 employees, created by the Government of Singapore in 1968 to help modernize the island nation.
However, when DBS brought in Paul Cobban, who is now Chief Operating Officer, Technology and Operations for DBS, to spearhead the bank’s transformation in 2009, they were far from best – in fact, they were among the worst.
Cobban recalls an eye-opening story from his first day at the bank. “I was in a taxi and I mentioned I worked at DBS,” Cobban recalls. “The taxi driver said DBS stood for ‘damn bloody slow.’” True enough, DBS had the lowest customer satisfaction scores of any bank in Singapore.
To kick off its transformation, DBS CEO Piyush Gupta instituted a new corporate strategy centered on the concept of ‘Asian-ness.’ One of Cobban’s first challenges, therefore, was figuring out how the bank should define ‘Asian service.’
There were dozens of possible definitions. “We spent six months narrowing down the definition of ‘Asian service’ to respectful, easy to deal with, and dependable,” Cobban explains. “This led to the acronym ‘RED,’ an adjective that became part of the corporate vocabulary.”
In order for the bank to be ‘RED’ then, Cobban instituted a series of process improvement events: five-day cross-functional workshops focused on eliminating waste – in terms of wasted customer time. “The metric was the customer hour,” Cobban says. “We took out 250 million customer hours of waste per year.”
The benefit to customers was dramatic. “One year later, we had the top customer satisfaction scores in Singapore,” Cobban says.
Shifting to Customer-Centered Design
Eliminating wasted customer time was only the first step for DBS. The next step? “We called a customer – a step we had never taken before as part of a process improvement event,” Cobban admits.
This customer had lost her credit card, which took the bank five days to replace. “She asked where her debit card was,” Cobban says. “We had replaced her credit card, but she had lost her entire handbag.”
The conversation was an eye-opening moment for Cobban’s team. They found that customers had three concerns when they lost their wallets. Are they able to get cash to get home? Is someone using their stolen credit card? And how do they get their life straightened out?
The result: they changed the bank’s call center script when customers lose their wallet or handbag. The new script: first, show empathy, then explain the process, and finally, provide phone numbers to help the customer get their life back together.
This customer-centered design was a game changer. “We changed the process to understand the customer at a whole new level,” Cobban says.
Making Banking Invisible
Once DBS started taking a customer-centric approach to its transformation, the pieces of the puzzle began to fall into place. One essential realization: “Banking is a small sliver of a job to be done,” according to Cobban.
People’s lives don’t revolve around banking, after all. If you’re making a major purchase like buying a refrigerator, the smaller and faster the banking piece, the better. “To make banking joyful, make the banking part invisible,” Cobban explains. “For example, getting out of an Uber.”
For many organizations undergoing digital transformation, the technology is front and center. But in DBS’s case, the better the technology, the less visible it becomes. “Digital is all about the business model, enabled by emerging technology and data,” Cobban says. “Great user experiences based on ecosystem plays to make the banking component invisible.”
This digital ecosystem of partners and other third-party participants in the customer journey is an essential part of DBS’s digital story. “As banking becomes commoditized, we need to control the ecosystem,” Cobban explains. “That’s how any bank avoids being a dumb balance sheet.”
Transforming the Organization
For any enterprise, the heavy lifting of digital transformation is always the organizational change behind the scenes, and DBS is no different. Cobban’s approach centered on identifying ‘blockers’ to change, and then using experiments to overcome them.
In fact, Cobban raised dealing with such blockers to the status of ritual. “We put in place a ritual to overcome the blocker,” Cobban says. “Then we changed the vocabulary, and introduced enablers to change.”
For example, DBS’s decision-making process had required people to ask permission from managers via email. Delays in responding or failure to respond altogether were the blockers that impeded progress.
To address these blockers, Cobban instituted weekly decision-making meetings that brought all interested parties together. “Teams present their ideas to decision-makers in person,” Cobban says. “99% of the time they get a yes answer on the spot.”
Strategic Transformation: Driving Innovation
Achieving greater efficiency and customer focus is only part of the transformation battle. The big win is driving better innovation, as it leads to strategic advantage.
Cobban realized that to drive innovation within DBS, he had to change the culture. “We recognized innovation was all about culture and behavior,” he says. “So we took our leaders and put them in ‘hackathons’ with startups. Hackathons replaced the executive training budget.”
Exposing executives to the startup mentality opened their eyes to new ways of doing business – a good start, but Cobban realized he had to spread such thinking across the organization.
Once again, Cobban defied conventional wisdom: “I told our innovation team: don’t innovate,” he says. “Instead, teach the rest of the organization to innovate.”
DBS has already chalked up a remarkable success with its newly transformed approach to innovation. It recently launched Digibank in India – an entirely mobile-centric banking service, with no branches whatsoever.
This bank will leverage artificial intelligence-driven automation in order to employ a tiny fraction of the back-office staff that a conventional bank normally requires.
As a result, Digibank can scale across the subcontinent with virtually no additional investment – and for its millions of customers, banking will be nearly invisible. It’s no wonder DBS won the award for best digital bank in the world.
First appeared at Forbes