Robin Speculand is the author of the recently released book “World’s Best Bank” that looks under the hood at how Singapore’s DBS Bank transformed itself from a traditional bank to a digitally driven organization by making banking “invisible” through its leverage of technology, becoming customer-obsessed, and transforming its culture. The bank’s revamp was recognized by Harvard University as one of the top ten digital transformations of the last decade. 

Speculand, who is also the CEO of Bridges Business Consultancy, recently spoke to The Asset on the growth and adoption of digitisation in the banking and financial services industry, and why not everyone will succeed in making the change to digital.

TA: The DBS digital adoption story is well known in the banking industry, but how much credit should go to the hires the bank made from outside the banking industry that helped push the change?

RS: The bank’s leaders recognized at the start of their digital transformation in 2014 that they did not have the skills and talent internally to achieve what they wanted to do, which was make banking joyful for their customers by leveraging digitization, and they set about hiring external talent.

TA: Was that a brave move and could it have backfired?

RS: I would not call it a brave move but a smart move. Yes, it could have backfired, but the bank had a very strong digital transformation mandate, which was understood by every part of the bank, and it also had consistent measures that aligned the initiatives across every department.

The new talent adopted and adapted to the DBS way. When an organisation does not have such a strong mandate, new talent can unintentionally end up diverting rather than accelerating the implementation.

TA: Do you have any idea how much the digital transformation cost them financially? And is that process now cheaper for other banks? 

RS: The bank invested approximately S$5 billion (US$3.6 billion) on technology alone and plans to keep its total IT spending to between S$800 million to S$900 million annually.

Proportionally, in the last couple of years, banks investing in digital transformation have the potential to invest less as technologies, such as cloud computing, become more common and less expensive.

However, to create the technology core platform required for digital transformation involves a heavy capex. And, considering that two-thirds of digital transformations are failing – as research from various organizations, such as ourselves at Bridges, Boston Consulting Group, and McKinsey & Company has revealed – leaders need to be aware that a digital transformation can destroy value rather than create it.

TA: Have you seen any banks not committing to digitizing their operations – for example, family-run private banks that value personal dealings above technology?

RS: Yes. In all the excitement and euphoria around digitization, it is essential to remember that there are always laggards. In Geoffrey Moore's book, “Crossing the Chasm”, he shares the distribution curve that is as valid today as when he first published it in 2000. The implication for banks is recognizing the importance of an omnipresence as there are customer segments that prefer going to the branch and printing out their balance in their bank book rather than using a mobile app.

Another scenario in which this is very relevant is in wealth management banking where customers expect a personal touch from their relationship manager (RM). It is not an unusual scenario today for the RM to be talking to the elder member in the family while the younger member is conducting their banking on their mobile while in the same room.

TA: Can every bank create a start-up culture? If not, why not?

RS: In theory, yes. However, as highlighted above, two-thirds of digital transformations are failing, and the hardest part of any transformation is changing the culture. Why? Because culture involves everything.

In our research into the state of digital in 2019, we published a white paper, Transforming Your Company into a Digital-Driven Business. From the research, we identified that the top three reasons why a digital transformation was failing was because leaders were struggling to change their mindset, organizations were struggling to change their culture, and there was a failure to recognize that the transformation was not about tweaking processes but a whole reshaping of the organization.

With leaders struggling to let go of traditional values and ways of working, the organisation will not be able to create the startup culture.

Creating a startup culture means working faster, being more agile, and responding quicker to customers. To make this happen means dramatically reducing bureaucracy, and this involves leaders letting go of control and empowering employees.

TA: In authoring the book, what was one thing that surprised you about the DBS case?

RS: At the start of their digital transformation, the DBS leadership team asked what was the biggest roadblock to its success. They discovered that it was not understanding or adopting the new technologies, but time-wasting meetings. They created a meeting governance called MOJO as the solution.

MO stands for “meeting owner”, who has three responsibilities – state the purpose and context of the meeting, summarize key points of the meeting at the end, and ensure everyone has an equal voice so that collective intelligence can be leveraged.

JO stands for “joyful observer”, whose responsibilities are to keep track of time and commit to giving honest feedback to the MO on how well he or she performed. The bank also developed a MOJO app (not a surprise) available to the public (perhaps a surprise) at www.meetingmojo.co.

As a result, having MOJO at each meeting more than doubled its effectiveness. Specifically, MOJO ensured meetings started and finished on time, thus saving more than 500,000 employee hours. In addition, the percentage of employees who say they have an equal share of voice in meetings has increased dramatically from 40% to 90%.

TA: When there is still pressure to make a profit, is it only some (larger) banks that have time and resources to study and experiment with emerging technologies?

RS: No. The challenge for banks today is that it's not about digitizing your bank, but revolutionizing the way you serve your customers. Understanding and adopting the new technologies of the industrial revolution 4.0 is compulsory because, if banks do not change, they will die.

This is not only because their competition will win over their market share, but because their customers’ expectations are dramatically changing and, if the bank does not change, the customer will change banks.

In the current strategic landscape, where working capital is reduced and leaders are under pressure from their board to implement their strategy right the first time, a bank may consider shying away from experimenting with emerging technologies, but this is a very short-term view that could have a long-term devastating impact.

TA: While banks are keen to roll out artificial intelligence and machine-learning solutions to customers, are customers really embracing the changes?

RS: Customers are not just embracing the changes but, in many situations, are driving banks to transform. With the revolution that is happening within, banking customers are expecting faster responses and more efficient processes.