This article is part of our Essential Guide: Essential Guide: How APAC firms can ride out the pandemic

How DBS is reaping the dividends of digital transformation

At DBS Bank, the Covid-19 coronavirus outbreak has demonstrated the value of technology and the investments it made over the past decade to modernise its technology stack

When some DBS Bank employees tested positive for Covid-19 early this year, the bank was able to use data from office access cards and Microsoft Office 365 calendars to conduct contact tracing within days. And within weeks, it rolled out an application that enables business customers to submit forms without visiting a branch.

The speed and agility at which DBS, Southeast Asia’s biggest lender, responded would not have been possible without the investments it made a decade ago to modernise its IT infrastructure, applications and business processes to spearhead digital transformation.

In an interview with Computer Weekly, DBS’s group CIO Jimmy Ng talks up the bank’s technology initiatives amid the coronavirus outbreak and the next steps in its digital transformation journey, while VMware’s vice-president and managing director for Southeast Asia and Korea, Sanjay Deshmukh, explains how the software company is supporting DBS in that journey.

Can you give us sense of how DBS is approaching technology to sharpen its competitive edge, especially with the entry of new digital banking players in markets across the region?

Jimmy Ng: I think we need to take a step back during times of crisis like the current coronavirus outbreak, because that will have great bearing on what’s going to happen after we emerge from the crisis. I sense that over the next two years, digital banking is going to be the main channel through which people are going to transact. Covid-19 has been the main catalyst for people to adopt digital banking and that’s going to accelerate digital adoption.

Right now, the crisis may seem like the worst of times because IT folks are working hard to keep the lights on, but it’s also the best of times because it has brought forth the value of technology and the investments we’ve made over the past decade to modernise our technology stack. But the transformation we’ve undertaken is not just in the way we’ve architected our infrastructure.

One of the biggest things we realised was the change in the mindset of our people. In the past five years, we’ve adopted agile and continuous integration and continuous delivery (CI/CD), enabling us to roll out releases more than 10 times faster than before – and it played out nicely during this crisis.

For example, when you have a crisis, customers do not want to come to the office to hand you trade documents because of social distancing rules. So, within a couple of weeks, we’ve implemented an application to enable customers to submit their documents digitally. We’ve been able to move very quickly and nimbly because of our processes and the infrastructure we’ve put in place.

Another area that we’ve put in a lot of effort is the use of data to make decisions. During the outbreak, when some of our staff were infected, we were able to use data from office access cards and Office 365 calendars to do contact tracing within days.

We also used data analytics and internet of things (IoT) to understand how we can space out our people so they can maintain a social distance. Our agility and modern infrastructure enabled us to ingest the data very quickly and has paid off in a rapidly changing environment. Amid all of that, we were still able to deliver on existing initiatives.

As for the new digital banking players, they will be formidable competitors, but we think we are in a very good position. In fact, we’re a digital bank already. We’re going to double up on our efforts and continue to provide digital offerings. I believe that this is going to be the battlefield, especially after Covid-19.

As we all know, digital transformation is an ongoing effort. What’s at the top of your mind at this point in time? How are you thinking two or three steps forward from a CIO’s perspective?

Ng: As we are battling Covid-19, we’ve been looking into technologies that we should focus on moving forward. For me, 5G is going to be a main infrastructure that will make it easier for us to work from home and extend our services – for example, mobile ATMs in more locations amid a pandemic or emergency.

There’s no such thing as winners or losers because at some point a particular technology will become dominant, and the rest will catch up eventually
Jimmy Ng, DBS

Another area is IoT and video analytics which will allow us to monitor crowds at ATMs and branches. And there will be more use cases that combine 5G, IoT and blockchain to enable our customers to manage their business.

Finally, let’s not forget artificial intelligence (AI) and machine intelligence (ML), because if we have 5G and IoT coupled with AI, ML and data, we’ll get a formidable suite of tools to enable our customer businesses and support our internal operations.

At the heart of the initiatives you talked about is the application and infrastructure stack. What changes or tweaks do you need to make in your technology stack to support those initiatives?

Ng: Our modern applications and stack form the basis of our technology foundation. Over the past five years, we have moved very aggressively into a virtual private cloud (VPC) environment. Very few banks have gone down that route, which has brought us a lot of benefits and enabled our staff to be very conversant in the technology.

The next step for us is containerisation and moving into a hybrid cloud environment to achieve productivity gains and scale. That includes the greater use of public cloud services. There will be cases where public cloud providers have better capabilities and scale from an infrastructure perspective, so the ability for us to adopt those capabilities, including native cloud services, will be key.

I understand that DBS is still running some legacy applications. How are you managing their transition to modern apps?

Ng: We have a dual-prong strategy to tackle that. First, we are containerising legacy applications that will give us the ability to adopt public cloud at scale. Second, we are chipping away our core banking system, so that it becomes a very small part of the entire infrastructure.

And this includes your mainframe applications? Are they going to be eliminated at some point?

Ng: I think mainframe technology has changed a lot and it’s getting modernised. Our strategy is still to chip it away, with only a small part of it remaining through containerisation. That said, I don’t think mainframe technology is going to come to a standstill.

The fact that IBM has bought Red Hat shows that there’s going to be some progress in how they’re going to provide a migration path or enabling the use of mainframe hardware in more productive ways. So, it remains to be seen and we’re keeping our options open depending on how things pan out.

You rightly mentioned that this space is still evolving. How do you then hedge against the risks that you might be taking on with the use of multiple technologies and platforms, such as VMware and Red Hat OpenShift in the Kubernetes space?

Ng: We have adopted a multi-pronged approach – even as we use both Cloud Foundry and OpenShift as our application platforms. We think the universe is big enough for a couple of players to co-exist. A multi-supplier strategy has always been part of our approach because technology moves so fast.

There’s no such thing as winners or losers because at some point a particular technology will become dominant, and the rest will catch up eventually. So, using a diverse set of technologies will give us the best innovation from leading suppliers, and as others improve, we can still reap the benefits of their improvements. Even for cloud, we’re not going to go with just one cloud provider.

How are you dealing with the potential complexities that could arise?

Ng: It’ll be a more complex environment and probably not as efficient because we have to maintain two or more technologies. However, the strive for efficiency needs to be balanced with technology obsolescence. It’s not an efficiency play; rather it’s a resilience play so that we can move forward as technology evolves.

We are constantly looking at new technologies and players we can place bets on. For example, we adopted MariaDB in the initial days and have scaled up its use, but we are also looking at new databases that are coming to market. As we scan the horizon, we will make some good choices and some bad choices, but hopefully more good ones than bad.

Sanjay Deshmukh: As customers like DBS go multi-cloud, they can choose AWS, Azure or Google. To solve the complexity of investing in multiple platforms, we’re giving them a common infrastructure fabric across multiple clouds, alleviating the need to train their employees on multiple technologies.

On the management side, Jimmy talked about chipping away old applications and putting them into containers. Let’s say for discussion sake, they run some of these applications in different cloud environments and infrastructure. Our management capability offers a consistent operations framework, which means if I'm an administrator, I will have one screen that gives me the ability to manage applications that are running in my datacentre on VMware infrastructure or a public cloud. This will help to shield organisations from the complexity of taking a multi-cloud approach.

We have been in this journey for the past 10 years and we are getting very comfortable with how we work, whether it is operating in squads or pulling together people from different departments to work in small teams and respond quickly to changing environments
Jimmy Ng, DBS

I’d also share a couple of things in terms of our relationship with DBS. Jimmy talked about their initiative that enables their customers to submit trade forms without visiting the branch –  if you break that down at the technology level, there are two things that are needed to respond to that situation.

First is the agility in building the application to respond to the business need. That’s one area where we’ve been partnering with DBS very closely with our Pivotal technology that provides the agility to build software in days, not months.

The second aspect is when developers are trying to respond to these market needs, they need infrastructure. In a traditional bank, it takes months or more to make the infrastructure available. With our partnership with DBS, their developers are able to self-provision the infrastructure that they need within the same day and serve their customers quickly.

Can you elaborate on any cultural challenges that you are grappling with when it comes to getting everyone up to speed on what the bank needs to do to take things forward from a technology perspective?

Ng: We have been in this journey for the past 10 years and we are getting very comfortable with how we work, whether it is operating in squads or pulling together people from different departments to work in small teams and respond quickly to changing environments.

Second, our culture of using data to drive insights has been fully entrenched. I think what we need to do more is to get people to understand the application of AI and the use of data to help the business in even more productive ways.

The third area that we’ve been looking at over the past two years is what we call a platform construct that brings business and technology teams together as co-owners of a particular platform. They own the budget and make decisions on what they want to build or operate. Everyone has the same set of key performance indicators (KPIs), and the biggest win is the true alignment of business and technology.

How does the open source culture play a part in the culture you’ve just described?

Ng: We are looking at becoming an engineering company and we run very much like a technology company. If you look at the characteristics of the big technology giants, embracing open source is always one of them. We have built a library of digital assets internally, and we’ve been debating whether some of those assets should be made open source because it’s part and parcel of being an engineering company.

So, don’t be surprised if one day, some of the toolkits that we have built are put out as open source software. We’ve benefited a lot from open source, so it’s also our responsibility to contribute to the open source community.

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