(Tiểu luận) emerging issues of management report topic digital transformation of dbs bank

Trang 1 FOREIGN TRADE UNIVERSITYBUSINESS ADMINISTRATION FACULTY---***---EMERGING ISSUES OF MANAGEMENT REPORTTopic: Digital Transformation of DBS BankStudents:Class: Lecturer: Trang 2 TA

FOREIGN TRADE UNIVERSITY

BUSINESS ADMINISTRATION FACULTY

-*** -EMERGING ISSUES OF MANAGEMENT REPORT

Topic: Digital Transformation of DBS Bank

Ngo Quy Nham

Hanoi, June 2023

TABLE OF CONTENTS

Y

INTRODUCTION 2

BACKGROUND TO ORGANIZATIONAL STRATEGIC CHANGE 3

1 Balance Scorecard 3

2 New elements of digital transformation framework 3

3 The model applied in this case study 5

DIGITAL TRANSFORMATION PROCESS 6

1 External Forces 7

2 Internal forces 8

3 Stakeholders 8

SWOT ANALYSIS OF CURRENT SITUATION 9

SOLUTION 11

IMPLEMENTATION 11

Y1 Short Term strateg 2 Long term strategy 14

CONCLUSION

REFERENCE

I INTRODUCTION

Digital transformation is becoming a critical success factor across industries and isaffecting every aspect of our lives as a consequence of the 4.0 industrial revolution.According to Microsoft, the Internet of Things (IoT), cloud computing, and artificialintelligence (AI) are widespread adoption, offering new ways for businesses tocomprehend, manage, and transform The banking industry, in particular, has had amassive shift towards digitization and DBS Bank stands out as a prime example ofhaving embraced digital transformation to renovate its operations, customerexperiences, and industry positioning in the world of banking and finance

DBS is a Singaporean multinational banking and financial services corporation, thelargest bank in Singapore and Southeast Asia with over 280 branches in Asia It used

to earn the lowest satisfaction score of any bank in the country for delivering a lousycustomer experience and being called "Damn Bloody Slow" DBS Bank now has built

a reputation as the pioneer in embracing new technology and changing bankingservices over time It has understood the need to proactively respond to the changingneeds of the digital age thanks to its clear vision and persistent focus on clients Thisreport discusses the difficulties and challenges that DBS banks encounter when

“rewiring the Enterprise for Digital Innovation”, thereby proposing solutions andimplementation plans for businesses

II BACKGROUND TO ORGANIZATIONAL STRATEGIC CHANGE

This identifies key procedures and assesses the effectiveness, quality, and innovation

of internal operations The firm can boost overall performance and customersatisfaction by optimizing internal processes

This identifies the organization's ability to adapt, innovate, and learn to sustain term success by measuring employee training, skills development, and organizationalculture

long-2 New elements of digital transformation framework

elements to create compelling experiences for customers They help to provide depth awareness of customer insights and human behavior

in-Companies are digitally reinventing operations by implementing advancedtechnologies based on Core process automation Companies are also integratingoperational and strategic decision-making, applying Data-driven decision-makingbased on algorithms and experimentation

With digital transformation, companies should create conditions so that employees will

be equipped with more knowledge and skills, be flexible in all situations and be readyfor the future

Businesses are upgrading their current business models with digital technology,developing and scaling multisided platforms to connect various stakeholders andfacilitate transactions amongst them, and expanding their product-based businessmodels by embracing information-based services

systems Externally facing platform powers customer-facing websites, apps, andprocesses, connecting with customers and ecosystem partners Data platform enablesintensive analytics, algorithm development, and testing without disrupting operationalsystems

3 The model applied in this case study

Our team decided to integrate “The Balanced Scorecard” and “New elements of digital transformation framework” to discuss DBs bank rewiring for Digital Innovation The reason is because they are the latest and the ideal models for this case

as DBS bank has applied some aspect for its digital transformation process and delivered a successful outcome

Issue in… None

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Unit03 Change Management…Emerging

Issue in… None

64

Organizational Change

Emerging

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Unit 04 BPM sadasd

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III DIGITAL TRANSFORMATION PROCESS

Phase 1 (2009 - 2013): Restructuring the bank from its core foundations

Upon joining DBS, Gledhill, Cobban, and other members immediately embarked onchanging the company culture, target market, target audience, and emphasizing Asianservices, introduced the strategic concept of "Asian-ness" and determined that DBS'sgrowth would be focused exclusively on the Asian market

Outstanding products are IDEAL 3.0 to enhance liquidity; DBS one tap for individualcustomers to digitize physical cards; DBS Remit for individual customers to instantlydeposit money in real-time in the Indonesian and Indian markets; Home Connect Appfor checking property valuations, view transaction prices in the area, and estimatemonthly repayments

The period from 2009 to 2013 laid a solid foundation and created significantmomentum for future development There was a logical progression of repositioningthe target market, redefining touchpoints to rebuild the customer journey, andrecognizing the importance of technology and digital transformation in bankingactivities at an early stage

Phase 2 (2013 - 2015): Positioning DBS as a world-class technology company

2014: The focus shifted towards providing exceptional care and optimizing servicesfor the SME customer market DBS prioritized facilitating easy access to loans andhelping businesses have better control over their funds, particularly through consultingservices

2015: The Chairman and CEO of DBS emphasized the profound impact of newtechnologies and evolving customer expectations on the financial industry Theyacknowledged that fintech startups were targeting various aspects of the financialservices value chain

EmergingIssue in… NoneBusiness Process Redesign from BookEmerging

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DBS recognized both the opportunities and challenges posed by Fintech companiesand focused on building technology as their core strength and collaborated withFintech organizations to create optimal products for financial services.

IV DRIVING FORCES OF CHANGE IN THE ORGANIZATION

1 External Forces

a Industrial Revolution 4.0

Adoption and popularity of Cloud and Cloud Native, Big Data and Analytics, ArtificialIntelligence/ Machine Learning (AI/ ML), AI powered chatbots, IntelligentAutomation and others propelled digital banking significantly especially acrosstraditiona

b Economic forces

At the time financial institutions in the United States and Europe were still reelingfrom the consequences of the 2008 global financial crisis, struggling with liquidityissues and laying off employees in regional markets Asian banks, on the other hand,were significantly less exposed to the crisis which is a opportunity to expand themarket position of DBS in Asia

c Competitive forces

Towards the end of the 2nd millennium, there were significant digitalisation and digitaltransformation programmes across many traditional banks besides the establishment ofpure digital/ neobanks as well as an implosion of FinTech unicorns & startups,platform and technology infrastructure company

d Demographic forces

In Asia’s emerging markets, however, our study shows that digital banking is mostpopular among the affluent and the young Penetration among higher-income groupswas nearly 40 percent compared with about 30 percent among lower-income groups

At the same time, about 40 percent of consumers from 21 to 39 years old that wesurveyed in these used digital banking

e Government policy

implemented in the period 2014-2018 One of the five years of that program isElectronic Payment which stated that: Singapore does not encourage people to usecash because it is difficult to control money sources and transaction addresses Instead,the state creates a national electronic payment infrastructure to help people andbusinesses make non-cash payments.

3 Stakeholders

Stakeholders who would be affected by the digital transformation process of DBS:

- Investors and shareholders:

They are looking forward to the benefits of the change but do not necessarilyexperience the change itself

- Managers:

They are leading, controlling the digital transformation to make sure the process isimplemented without any unconditional mistakes They also have to hire and train fornew positions such as IT, product development

- Employees:

They will have to undergo training to be equipped with digital business skills,understand changes of market and customer preferences Employees will be providedwith all skills they need to keep up with the pace of change

- Customers:

They will be served and communicated in time through multiple channels It is moreconvenient and time-saving because all processes can be implemented anywhereinstead of going directly to the bank

- Society:

Strong partnerships with other businesses and organizations will create collaborationand we can support tackling real-world sustainability challenges together Growingnetworks will also contribute to the sustainability of the industry and economy ingeneral, which leads to positive impacts on the community

- Regulators and Policy makers:

Regulatory risks and new regulatory frameworks that will be needed due to increasingcompetition with fintech/ tech platforms and to macro trends such as sustainability.Data governance capabilities and financial advisory processes are concerned to ensurethat the interests of our customers stay protected

V SWOT ANALYSIS OF CURRENT SITUATION

Strength

- Superior product and service quality:

This advantage can help DBS Digital to further increase its market share as the currentcustomers are extremely loyal to it.DBS Digital can compete with other global players

in the international market

- First Mover Advantage:

DBS Digital has first mover advantage in number of segments It has experimented invarious areas of innovation The Finance and Accounting solutions and strategies hashelped DBS in coming up with unique solutions to tap the un-catered markets

- Robust Domestic Market that DBS Digital Operates:

DBS can easily grow in its domestic market without much innovation but will requirefurther investment into research and development to enter the international market.The temptation so far for the managers at DBS is to focus on the domestic marketonly

Weakness:

- Low Return on Investment: Even though DBS has a stable balance sheet, one metricthat needs reflection is “Return on Invested Capital” In areas of Innovation that DBSDigital operates in, the most reliable measure of profitability is Return on InvestedCapital rather than one favored by financial analysts such as – Return on Equity &Return on Assets

- Little experience of the international market: Even though it is a major player in thelocal market, DBS has little experience in the international market DBS needsinternational talent to penetrate into developing markets

Opportunity:.

- Increasing Standardization: DBS can leverage this trend to reduce the number ofofferings in the market and focus the marketing efforts on only the most successfulproducts

- Lucrative Opportunities in International Markets:

Opportunities in Adjacent Markets: DBS can explore adjacent industries to furthermarket growth especially by extending the features of present products and services

- E-Commerce and Social Media Oriented Business Models: E-commerce businessmodel can help DBS to tie up with local suppliers and logistics providers in theinternational market, especially Asia market

Threat:

- Government Regulations and Bureaucracy: DBS should keep a close eye on the fastchanging government regulations under the growing pressure from protest groups andnon government organizations especially regarding environmental and labor safetyaspects

- International and Asian Geo-Political Factors: For example, developments such asBrexit, Russian sanctions, foreign exchange crisis & inflation in Venezuela, lower oilprices etc are impacting the international business environment

social media and e-commerce, so can the competitors – both local and internationalcompetitors In addition, DBS would face with the intense competition from bothtraditional banks and new fintech players

VI SOLUTION

In the short term, the company should continue to keep the current advancedtechnology developments in all fields of customers, employees experiences andoperations

The company also should pay attention to the internalization of its core competency ofthe employees and the company in general - specifically here is to be able to integratetechnology The company is outsourcing external vendors its internet and mobilebanking platform but it still needs to stay responsive and developed towards activedevelopment of technology integrations as a core competency over the new entrants

In the long term, the company should emphasize strategies in terms of customerexperience and digital innovation Regarding customers, DBS Bank utilizes speechanalytics to support the bank's digital agenda and encourages customers to go digital,resulting in improved customer satisfaction and problem resolution Furthermore, thecompany can consider getting closer to its young target audience through itswidespread appearance on social platforms to keep up with ever-changing customerprofiles

DBS should stay ahead of digital innovation by tapping into the creative potential ofemployees by establishing innovation programs, providing resources and support fortheir ideas, and recognizing and rewarding innovative contributions In doing this, itfosters a culture of innovation promoting a mindset of continuous learning,experimentation, and risk-taking

VII IMPLEMENTATION

1 Short Term strategy

is likely to have 20 browser tabs open or is using an outdated plug-in to track theirtasks Then we look at the user’s persona, as well as the applications and tools theyneed to get work done and marry these factors

Invest in user-friendly mobile applications, intuitive online banking platforms, andpersonalized services but ensure confidentiality of customer information, prevent andhandle fraud through the platform to protect customers

c Operations

- KPI:

Implementing new technology into operation to increase efficiency and productivity