Exploring burningness at DBS

We look at burningness through the lens of DBS Bank - a leading financial services group headquartered in Singapore that operates across 18 markets - and the decisive steps taken by its CEO, Piyush Gupta. When he joined DBS in 2009, the bank was seriously underperforming and losing traction. Its ATMs frequently ran out of cash, wait times at the branches and call centres were long, customer complaints were growing and market share at home was under pressure.

Burningness is a critical first step in a company’s journey towards out- side-in thinking. It is a visceral state, a time when a company feels like something is on fire, a raging force that simply has to be responded to decisively. It might be pain, fear or ambition, but something has to change. And this need for change is so overwhelmingly crucial, so urgent and so important that conventional approaches, and continuing with the current model, have to be ruled out because they will never be enough.

Burningness creates the conditions that mean outside-in initiatives, with their definite costs and uncertain benefits, become the only way forward.

Not all types of burningness are equal - there is a hierarchy across pain, fear or ambition. The most effective is pain. It is unarguably present, and it means something different has to be done. This is what easyjet experienced at the start of its journey. Fear is a step less effective - it is a shared view that there is a need to change, but it might not be now. If the first step is risky for the core business - think digital photography and Kodak - then a team might choose to wait. Ambition is the least pressing. Things are fine and may carry on being so. But the team has a burning desire to be somewhere else, somewhere better. There’s an enemy to defeat, a cause to pursue and they will do almost whatever it takes to get there.

In 2013, DBS was experiencing the most acute burningness - pain. The underperforming Singapore-based bank was four years into an ambitious transformation programme to become a world-class, multinational bank. Under the new leadership of CEO Piyush Gupta, a lot had been achieved but much remained to be done.

Operations and technology were ‘in a disastrous state, with no real metrics, no clear targets of where you wanted to be, and zero aspirations around customer service,’ said Dave Gledhill, head of group technology and operations since 2008.33

Everything was going wrong. An expensive project to fix operations had failed with four years still to go and costs running to SS300 million, 50% over budget. DBS’s market share was falling. The bank’s overseas growth strategy wasn’t working. And Gupta was acutely aware of the growing threat from nimble technology companies like China’s Alibaba, which had been offering micro loans to its customers since 2008.

The situation was exacerbated on August 1, 2013, when the Indonesian government blocked DBS’s much-needed breakthrough deal to acquire the country’s Bank Danamon. This was a major setback to DBS’s expansion plans. The acquisition would have helped grow DBS’s presence in Asia’s growth markets, but it was not to be.

Despite Gupta’s earlier hopes, DBS had not been able to increase its presence in growth markets where the Singapore bank already had a footprint - China, India and Indonesia. High costs, regulatory uncertainty and scarcity of suitable targets were making mergers and acquisitions (M&As) in existing markets look impossible. In China and India foreign banks were limited to an ownership stake of 20% and 10% respectively. Acquisitions were no longer going to be a viable path for DBS’s growth.

Alongside all of the pain from the bank’s overseas growth strategy not working, Gupta also felt fear that financial technology companies (fin- techs), could deliver many of the same services as DBS without expensive branch networks or legacy technology issues. As Gupta explained:

Alibaba scared the living daylights out of us. They were raising money, making payments and making loans with zero branches and completely electronically. They were reaching millions of people. We knew that the change in our industry was upon us, that the discontinuity had arrived.54

This sense of burningness was acute during a 2013 meeting with DBS’s executive board. Gupta was convinced that something fundamental had to change to safeguard the bank’s future. In the meeting, Gupta asked for the board’s support to change his original transformational ambition of creating a world-class multinational bank into something significantly different. He wanted DBS to become a 22,000-person start-up, a bank fit for the future that could complete with fintechs like Alibaba and Atom Bank on their own terms.

The board supported Gupta completely. They agreed DBS would need to act boldly to transform three elements of its business: its technology, its customer journey and its culture. Burningness had propelled DBS’s leadership to radically change the bank’s growth strategy, a decision that would require a huge investment of time and resources and one that had no guarantee of working. The bank was setting out to move from inside-out to outside-in.

This dramatic shift in mindset saw the birth of a number of big initiatives, including fixing the technology and rethinking the customer journey, which would later include the idea of making banking joyful. They redesigned branches with seating for customers and launched a queuing system so customers could be sent an SMS message when it was their turn. They also made changes to encourage new beliefs, for example allowing employees to work with start-ups on hackathons to solve business problems from a customer perspective and make the company tech-literate.

DBS conducted over 1,000 experiments in 2015, in which teams tried new ways to find solutions for customer and business problems. More than 100 prototypes were developed across the bank as a result. The bank also established start-up accelerators, which allowed colleagues to interact with people who had very different mindsets. These programmes touched about 2,000 people across the bank in 2015 and 5,000 in 2016.

In 2014, the bank set a target to improve a hundred customer journeys and conducted over a thousand ‘looking’ activities, including customer interviews, surveys and immersions, to understand consumers better. It set up a Human-Centered Design Lab and trained 700 staff in human-centred design. It partnered with A*STAR3S to support its use of big data.

In 2015, the bank trained all 250 managing directors in customer journey techniques and asked each of them to lead a customer journey project. As a result, DBS had more than 300 customer journey projects running in every part of the bank. Thousands of bank staff across functions, levels and geographies were involved in these projects, which pushed them to think and act differently.

DBS’s burningness propelled the bank to launch India’s first mobile-only bank in April 2016 - DBS digibank India - targeting 125 million English language speakers with smartphones. The pain of overseas expansion could be overcome with a digital-only strategy. And taking its cues from fintechs rather than the traditional banking industry, the new bank was completely branchless and did not offer cheques, which were popular in India.

With Sachin Tendulkar, a popular Indian cricket star, as its brand ambassador, the platform had three key features. First, account opening was completely paperless and electronic, with customer authentication using biometrics and the Aadhaar card, a unique identifier for every Indian resident. DBS partnered with a popular national cafe chain, allowing potential customers to visit over 500 designated outlets to complete the authentication process. Second, customer service was delivered through an artificial intelligence driven virtual assistant developed in partnership with Kasisto, a US-based software company serving the banking industry. Third, it used a dynamic soft token security system embedded in the customer’s smartphone which was more secure than inputting one-time passwords received via SMS.

In its 2017 Annual Report, the bank revealed it had signed up over 1.8 million customers since its launch. The burningness experienced by DBS four years earlier had led it ultimately to expansion into India with an entirely new business model fit for the future - a true customer-led success. Moreover, digibank subsequently launched into Indonesia, the market that had prompted Gupta’s bold change of strategy in 2013.

DBS’s burningness propelled the bank in a new direction. But in our description of the journey to outside-in beliefs this is just the start. The next step is about specific, bold action through Moments of Belief.

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