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Inside DBS Bank’s digital journey
The Singapore-based bank laid the foundation for its digital strategy a decade ago, starting with an overhaul of its IT systems before going big on cloud computing in later years
Banks and financial institutions across the Asia-Pacific (APAC) region are in the midst of a rush to transform digitally, in a bid to stay relevant to customers and better compete with disruptive startups.
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But to DBS Bank, Southeast Asia’s largest bank by market capitalisation, that transformation started as early as a decade ago when its current group CIO David Gledhill came onboard in 2008. Besides laying the foundation for the bank’s digital initiatives that has won industry accolades, Gledhill has also been instrumental in driving DBS Bank’s cloud strategy in later years.
In an exclusive interview with Computer Weekly, Gledhill, who is also head of group technology and operations at DBS, offers insights into the bank’s digital journey in areas such as change management, keeping pace with technological developments and IT strategy.
DBS embarked on a journey to transform its IT infrastructure about a decade ago. What was the guiding principle that you’ve adopted in this transformation journey?
Gledhill: When I first got here more than nine years ago, there had been a heavy investment in technology, but we were not addressing the right things. There was a big project that replaced core banking in Singapore and Hong Kong. It was late, went over budget and, quite honestly, we didn’t have the capability to do it.
Meanwhile, at that time, we had the ambition to grow in growth markets like China, India, Indonesia and Taiwan. The systems in those locations were just not fit for purpose – they couldn’t scale and they needed a lot of attention. But because the focus was on Singapore’s core banking system, nothing else was getting done. It was clear we had to make a dramatic shift to focus on resiliency and innovation, and get the business moving. So we pushed systems such as payment engines and management systems into all of those locations.
Could you provide examples of capabilities in systems that weren’t measuring up?
Gledhill: There was quite a number. For example, we didn’t have capabilities like straight through processing and there was no single view of the customer. We also couldn’t do private banking because we didn’t have a private banking and wealth management platform. We didn’t have liquidity management systems, so cash management didn’t work in some locations. A lot of functionalities just weren’t there – not just in growth markets but also in Singapore.
The key is to be very clear about what it is that will add the most value to the business in the quickest way, and use that to drive transformation rather than implement technology for technology’s sake. Many organisations create grand masterplans that look fabulous, but are super hard to execute and don’t necessarily have immediate value.
David Gledhill, DBS
What were some of the organisational challenges you had to overcome along the way?
Gledhill: We made sure we had clarity on what needed to be fixed, and for that, we used a red, amber and green chart for all our systems and capabilities. That was a one-page map that detailed the company’s priorities. We used to roll that out every three months after discussions at the board and senior management level.
Everybody had a stake in making the decisions collectively. So whether you are country manager or a line of business, you’ll see the things that will be done for you. Everyone had skin in the game and was clear about what needed to be done – with priorities and trade-offs. That got everyone aligned.
Were there pushbacks from different teams despite efforts to put everyone on the same page? What about organisational changes that you had to make to support the transformation?
Gledhill: There’s always going to be discussions and noise, so the key is having the right channels to get those discussions and debates agreed. It’s also about getting a good planning framework that everyone buys into, and allowing for course adjustments. You’re never going to get it 100% right, so to be able to flag things up, adjust things and make some bets along the way is very important.
As for organisational changes, we made big changes to my team when I first came in. We had to make sure we had people with the right technology skills to move forward, so over half the team was changed in the first six months. The other big change was insourcing. When I arrived, 85% of our work was outsourced.
All of our infrastructure and applications were with IBM, and Accenture was driving our core banking programme. We basically had a bunch of technologists signing contracts, so re-growing our technology DNA and knowhow was a big part. We started with the leaders before gradually building out capabilities across the IT organisation. Now, 85% of our work is insourced. That was the biggest organisational shift we made.
The value of IT as a business driver
Did you face the same challenge that some other organisations are facing in proving the value of IT as a business driver rather than a cost centre?
Gledhill: We’ve been very fortunate in getting the support from the CEO, chairman and the board, who never once questioned the value of IT to the organisation. All of them fully believe in “you’re only as good as your IT”, so there has been a big encouragement to invest, drive the agenda and not question it.
We didn’t try to justify the cost of every single project we did. We had a vision of where we wanted to take the bank, and we believed in that vision enough to not waste time cost-justifying because you never could. If you have a family, you need a home, but do you cost-justify the home? It was almost as basic as that. IT is just core to doing business – you have to invest in it and get it right to get future benefit.
David Gledhill, DBS
As a bank with a growing footprint, how does the company maintain the agility it needs to keep up with what’s going on in the industry?
Gledhill: Alignment is key, and a lot of that is driven by group scorecards with shareholder, employee, customer and digital value metrics. We spend a lot of time on them and work them extensively through the organisation. The CEO has his own scorecard as does every group in the company.
The leadership team sits together and critiques every scorecard. By the end of it, we know each other’s scorecard and have a stake in it. In our digital strategy, for example, our scorecard has metrics around driving acquisition, transactions and engagements. There’s a numerical number or percentage increase that every group in the business agrees to deliver on. That really helps to align everybody on the same goals.
Another aspect is cultural transformation. For example, customer experience is a big thing, so we came up with a customer mantra called RED, which stands for respectful, easy to deal with and dependable. And we have change programmes that encompass training, education and celebrating customer stories to drive that mantra through the organisation. Behind the scenes, it’s a big engineering effort to put in place all the structures to make that vision real for everybody.
As the CIO, how do you cut through the hype and noise in the technology industry and decide on what works for the organisation?
Gledhill: I do my own research and track what other companies are doing. We also try things out at our digital labs. For example, I decided to retrain myself by building mobile apps so I can understand them and know what my developers are talking about. Because a lot of things are new and you can’t expect to know everything all the time, you just got to keep learning. Otherwise, when you’re listening to others trying to sell you something, how do you evaluate if that’s right for you?
Read more about IT in the APAC financial industry
- Building on earlier efforts to harness cloud computing to support growing compute workloads, DBS’s new private cloud datacentre will be smaller, greener and cheaper to run.
- Australia’s Commonwealth Bank has unveiled a data analytics platform to help SMEs make better business decisions and improve customer experiences.
- DBS has claimed the honour of having the world’s biggest banking API platform with over 155 APIs that developers can plug into to create a variety of services.
- Malaysia’s RHB Bank has launched a chatbot to help consumers apply for personal loans, making it the latest bank in Southeast Asia to make use of chatbots to improve customer service.
I recently met with CA’s APAC president, and he was adamant the mainframe is here to stay for a while. What are your thoughts on that?
Gledhill: We are openly declaring we’re coming off the mainframe. We haven’t written a new application for the mainframe for probably 15 years. It’s not that there’s something wrong with mainframes, it’s just that mainframe applications are not modern applications so we have to rebuild them. And when we rebuild them, we’re going to do it on x86 and cloud-ready architectures provided by the top cloud suppliers.
The process will be gradual. We have been reducing the number of mainframe applications from 120 in December 2016, to 90 a year later. This year, we’re reducing the number to 60. The only platform we’re building for is x86, because most of the compute power on the cloud is x86. If cloud suppliers start to offer different platforms, like the mainframe or IBM Power, on cloud, we may start to look at them.
What keeps you up at night?
Gledhill: I generally sleep quite well. If anything keeps me up at night, it’s the excitement of all the cool stuff we’re doing. If there’s something in my head before I sleep, it stays there. But I never send emails to my team immediately, because I never look at emails after I leave the office or on weekends. It’s also a point of principle – if I send something on a weekend, it cascades through and could have hundreds of people working just because I came up with an idea on a Saturday afternoon, and that’s not fair.