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 Students: Nguyễn Trần Diệu Anh - 2011250013 Nguyễn Kim Thanh - 2013250027 Vũ Thị Quỳnh Nga Lưu Phương Linh Class: Lecturer: - 2014250208 - 2013250014 Trần Thị Phương Nhung- 2113250031 EIM_QTRE304.CLC.1 Ngo Quy Nham Hanoi, June 2023 TABLE OF CONTENTS Y INTRODUCTION .2 BACKGROUND TO ORGANIZATIONAL STRATEGIC CHANGE Balance Scorecard New elements of digital transformation framework 3 The model applied in this case study .5 DIGITAL TRANSFORMATION PROCESS External Forces Internal forces Stakeholders .8 SWOT ANALYSIS OF CURRENT SITUATION SOLUTION 11 IMPLEMENTATION 11 Y1 Short Term strateg Long term strategy 14 CONCLUSION REFERENCE I INTRODUCTION Digital transformation is becoming a critical success factor across industries and is affecting 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 artificial intelligence (AI) are widespread adoption, offering new ways for businesses to comprehend, manage, and transform The banking industry, in particular, has had a massive shift towards digitization and DBS Bank stands out as a prime example of having embraced digital transformation to renovate its operations, customer experiences, and industry positioning in the world of banking and finance DBS is a Singaporean multinational banking and financial services corporation, the largest 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 lousy customer experience and being called "Damn Bloody Slow" DBS Bank now has built a reputation as the pioneer in embracing new technology and changing banking services over time It has understood the need to proactively respond to the changing needs of the digital age thanks to its clear vision and persistent focus on clients This report discusses the difficulties and challenges that DBS banks encounter when “rewiring the Enterprise for Digital Innovation”, thereby proposing solutions and implementation plans for businesses II BACKGROUND TO ORGANIZATIONAL STRATEGIC CHANGE Balance Scorecard This focuses on financial outcomes and assesses the financial performance of the company It ensures that the company's strategy is in line with its financial objectives This focuses on how the company engages with customers and measures market share, customer loyalty, and satisfaction By providing superior value and catering to customer demands, it helps identify strategies that attract and keep clients This identifies key procedures and assesses the effectiveness, quality, and innovation of internal operations The firm can boost overall performance and customer satisfaction by optimizing internal processes This identifies the organization's ability to adapt, innovate, and learn to sustain longterm success by measuring employee training, skills development, and organizational culture New elements of digital transformation framework Experience design, Customer Intelligence and Emotional engagement are essential elements to create compelling experiences for customers They help to provide indepth awareness of customer insights and human behavior Companies are digitally reinventing operations by implementing advanced technologies based on Core process automation Companies are also integrating operational and strategic decision-making, applying Data-driven decision-making based 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 ready for the future Businesses are upgrading their current business models with digital technology, developing and scaling multisided platforms to connect various stakeholders and facilitate transactions amongst them, and expanding their product-based business models by embracing information-based services The core platform serves as the technology backbone for operational and transactional systems Externally facing platform powers customer-facing websites, apps, and processes, connecting with customers and ecosystem partners Data platform enables intensive analytics, algorithm development, and testing without disrupting operational systems 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 Document continues below Discover more Emerging Issue from: in Management QTRE.306 Trường Đại học… 9 documents Go to course The New Elements of Digital Tr Emerging Issue in… None Unit 06 Digital 28 64 21 Transformation 2022 Emerging Issue in… Unit03 Change Management… Emerging Issue in… None Organizational Change Emerging Issue in… Unit 04 BPM 80 None sadasd None Emerging Issue in… None Business Process III DIGITAL TRANSFORMATION PROCESS Redesign from Book Phase (2009 - 2013): Restructuring the bank from its coreEmerging foundations None Issue in… embarked on Upon joining DBS, Gledhill, Cobban, and other members immediately changing the company culture, target market, target audience, and emphasizing Asian services, introduced the strategic concept of "Asian-ness" and determined that DBS's growth would be focused exclusively on the Asian market Outstanding products are IDEAL 3.0 to enhance liquidity; DBS one tap for individual customers to digitize physical cards; DBS Remit for individual customers to instantly deposit money in real-time in the Indonesian and Indian markets; Home Connect App for checking property valuations, view transaction prices in the area, and estimate monthly repayments The period from 2009 to 2013 laid a solid foundation and created significant momentum for future development There was a logical progression of repositioning the target market, redefining touchpoints to rebuild the customer journey, and recognizing the importance of technology and digital transformation in banking activities at an early stage Phase (2013 - 2015): Positioning DBS as a world-class technology company 2014: The focus shifted towards providing exceptional care and optimizing services for the SME customer market DBS prioritized facilitating easy access to loans and helping businesses have better control over their funds, particularly through consulting services 2015: The Chairman and CEO of DBS emphasized the profound impact of new technologies and evolving customer expectations on the financial industry They acknowledged that fintech startups were targeting various aspects of the financial services value chain DBS recognized both the opportunities and challenges posed by Fintech companies and focused on building technology as their core strength and collaborated with Fintech organizations to create optimal products for financial services IV DRIVING FORCES OF CHANGE IN THE ORGANIZATION External Forces a Industrial Revolution 4.0 Adoption and popularity of Cloud and Cloud Native, Big Data and Analytics, Artificial Intelligence/ Machine Learning (AI/ ML), AI powered chatbots, Intelligent Automation and others propelled digital banking significantly especially across traditiona b Economic forces At the time financial institutions in the United States and Europe were still reeling from the consequences of the 2008 global financial crisis, struggling with liquidity issues 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 the market position of DBS in Asia c Competitive forces Towards the end of the 2nd millennium, there were significant digitalisation and digital transformation programmes across many traditional banks besides the establishment of pure 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 most popular among the affluent and the young Penetration among higher-income groups was 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 we surveyed in these used digital banking e Government policy Smart Nation is an initiative of Prime Minister Lee Hsien Loong that has been implemented in the period 2014-2018 One of the five years of that program is Electronic Payment which stated that: Singapore does not encourage people to use cash because it is difficult to control money sources and transaction addresses Instead, the state creates a national electronic payment infrastructure to help people and businesses make non-cash payments Internal forces Strategic change Historically, DBS and many banks have been seen as "old guardians": operating in a bureaucratic and rigid manner: DBS wants to completely change the way users look away from banks, towards values related to technology startups The qualities commonly associated with startups-high growth, positive energy, and constant innovation—are what DBS desire to emulate 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 not necessarily experience the change itself - Managers: They are leading, controlling the digital transformation to make sure the process is implemented without any unconditional mistakes They also have to hire and train for new 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 provided with 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 more convenient and time-saving because all processes can be implemented anywhere instead of going directly to the bank - Society: Strong partnerships with other businesses and organizations will create collaboration and we can support tackling real-world sustainability challenges together Growing networks will also contribute to the sustainability of the industry and economy in general, which leads to positive impacts on the community - Regulators and Policy makers: Regulatory risks and new regulatory frameworks that will be needed due to increasing competition with fintech/ tech platforms and to macro trends such as sustainability Data governance capabilities and financial advisory processes are concerned to ensure that 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 current customers 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 in various areas of innovation The Finance and Accounting solutions and strategies has helped 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 require further 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 market only Weakness: - Low Return on Investment: Even though DBS has a stable balance sheet, one metric that needs reflection is “Return on Invested Capital” In areas of Innovation that DBS Digital operates in, the most reliable measure of profitability is Return on Invested Capital 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 the local market, DBS has little experience in the international market DBS needs international talent to penetrate into developing markets Opportunity: - Increasing Standardization: DBS can leverage this trend to reduce the number of offerings in the market and focus the marketing efforts on only the most successful products - Lucrative Opportunities in International Markets: Opportunities in Adjacent Markets: DBS can explore adjacent industries to further market growth especially by extending the features of present products and services - E-Commerce and Social Media Oriented Business Models: E-commerce business model can help DBS to tie up with local suppliers and logistics providers in the international market, especially Asia market Threat: - Government Regulations and Bureaucracy: DBS should keep a close eye on the fast changing government regulations under the growing pressure from protest groups and non government organizations especially regarding environmental and labor safety aspects - International and Asian Geo-Political Factors: For example, developments such as Brexit, Russian sanctions, foreign exchange crisis & inflation in Venezuela, lower oil prices etc are impacting the international business environment 10 - Threats of New Entrants: As DBS can leverage low cost of reaching customers using social media and e-commerce, so can the competitors – both local and international competitors In addition, DBS would face with the intense competition from both traditional banks and new fintech players VI SOLUTION In the short term, the company should continue to keep the current advanced technology developments in all fields of customers, employees experiences and operations The company also should pay attention to the internalization of its core competency of the employees and the company in general - specifically here is to be able to integrate technology The company is outsourcing external vendors its internet and mobile banking platform but it still needs to stay responsive and developed towards active development of technology integrations as a core competency over the new entrants In the long term, the company should emphasize strategies in terms of customer experience and digital innovation Regarding customers, DBS Bank utilizes speech analytics to support the bank's digital agenda and encourages customers to go digital, resulting in improved customer satisfaction and problem resolution Furthermore, the company can consider getting closer to its young target audience through its widespread appearance on social platforms to keep up with ever-changing customer profiles DBS should stay ahead of digital innovation by tapping into the creative potential of employees by establishing innovation programs, providing resources and support for their ideas, and recognizing and rewarding innovative contributions In doing this, it fosters a culture of innovation promoting a mindset of continuous learning, experimentation, and risk-taking VII IMPLEMENTATION 11 Short Term strategy a Employee experience - KPI: Performance enhancement - Target: Optimize employees’ digital experience, increase productivity and save time when working on technical devices - Initiatives: DBS should leverage digital experience management to personalize employee experiences The bank can collect telemetry data from devices and user behavior data and then analyze that for actionable insights We can identify, if an employee is likely to have 20 browser tabs open or is using an outdated plug-in to track their tasks Then we look at the user’s persona, as well as the applications and tools they need to get work done and marry these factors b Customer experience - KPI: Enhance customer experience - Target: Provide customer with better service and product - Initiatives: Classify customers based on various attributes for easier management: for personalized marketing campaigns, tailored product offerings, and more effective customer relationship management Invest in user-friendly mobile applications, intuitive online banking platforms, and personalized services but ensure confidentiality of customer information, prevent and handle fraud through the platform to protect customers c Operations - KPI: Implementing new technology into operation to increase efficiency and productivity 12 - Target: Improve cybersecurity infrastructure and expand business models - Initiatives: Allocate funds to reinforce its cybersecurity infrastructure, including advanced threat detection systems, robust encryption protocols, and regular security audits DBS can expand their product-based business models by extending the features of present products and services d Digital platform - Externally facing - KPI: Connecting with customers and ecosystem partners using digital platform - Target: Increase efficiency and bring convenience to clients - Initiatives: Cooperate with many other partners to reach more customers, combine their services with partner's products 13 Long term strategy Manage expenses Be cost-efficient while investing for growth, with cost-income ratio improving over time Streamlining the Expense Management Process using automation, integration DBS Bank can connect the reporting process with other applications such as accounting software in order to avoid entering the same data twice manually This will save time and effort in managing the company expenses DBS can also take advantage of digital and eliminate the paperwork, back data up on clouds to simultaneously keep track of data and move forward sustainable banking Increase customer satisfaction Achieve broad based increase in customer satisfaction across markets and segments Firstly, DBS can be active on Twitter, Facebook and LinkedIn, and respond to almost 100% of all queries/ feedback through these platforms within one hour Also, they should conduct annual surveys to identify areas for improving our value proposition to customer Secondly, due to the fact that customers usually struggle to remember complex passwords, voice recognition enabled its call centers to improve customer experience with unique voice patterns, reducing verification times and enhancing overall security 14 Reduce manual efforts by driving end-to-end straight-through processing and instant fulfillment Increase automation across units, products and channels DBS should focus on automating our processes by driving straight-through processing and instant fulfillment HR has started to recruit differently by using Jobs Intelligence Maestro (JIM), a virtual recruitment bot that helps review resumes and pre-screen job applicants JIM has reduced candidate screening time by 75%, freeing up recruiters’ time so that they can more high-value work - : + Employee engagement + Inculcate a startup culture and mindset - : + Maintain employee engagement level - : CEO also engages and interacts with employees through their own digital community platform – and receives employee queries and suggestions through his online blog In addition, senior management hold regular department town halls and events to engage their teams on business plans, performance goals and other areas of interest Employees can be involved in innovation programmes such as hackathons, incubator workshops, platform events and partnerships with the fintech community 15 VIII CONCLUSION While the digital economy is growing at a faster rate in every industry, banking businesses are focusing their efforts on digital transformation as human demand rises sharply due to industrial revolution 4.0 Despite the many challenges and resistances to change, it is indisputable that digital transformation provides organizations with numerous benefits, including improved resource management, data-driven customer insights, a better customer experience, enhanced profits, agility, and productivity Understanding the strengths and weaknesses, as well as the opportunities and challenges, will make it easier for DBS bank to improve digital transformation and achieve future success IX REFERENCE 1.https://www2.deloitte.com/content/dam/Deloitte/uk/Documents/financial-services/ deloitte-uk-future-of-banking-employee-experience-imperative.pdf#page=20 2.https://seafit.org.vn/phat-trie%CC%89n-ngan-hang-so-kinh-nghie%CC%A3m-quocte-va-bai-ho%CC%A3c-cho-vie%CC%A3t-nam/ 3.https://www.chuyendoi.so/2018/09/dbs-va-hanh-trinh-chuyen-doi-ngan-hang-sodigital-banking.html 4.https://www.dbs.com/annualreports/2016/english/pdf/01_DBS%20Annual %20Report%202016-Full.pdf Transformation, T., Bonnet, a., Westerman, a., Safari, a and MIT Sloan Management Review, 2., 2022 by Bonnet, Didier, author, Westerman, George, author [online] Available at: https://prism.librarymanagementcloud.co.uk/bournemouth-ac/items/1211462? query=author%3A%28westerman%2C+george%29&resultsUri=items%3Fquery %3Dauthor%253A%2528westerman%252C%2Bgeorge%2529 [Accessed 27 March 2022] Clockwork 2022 - Clockwork [online] Available at: [Accessed 26 March 2022] 16 More from: Emerging Issue in Management QTRE.306 Trường Đại học Ngo… 9 documents Go to course The New Elements of Digital Tr Emerging Issue in Management None Unit 06 Digital 28 Transformation 2022 Emerging Issue in Management None Unit03 Change 64 Management handout Emerging Issue in Management None Organizational Change 21 Emerging Issue in Management None More from: Diệu Anh Nguyễn… 28 Trường Đại học Ngoại… Discover more Principles of marketing 66 Principle of Marketing None Report tổng Nh óm 18 15 Human Resources Business Ethics Group Ethics 23 None None Selected Business Management Tools Human 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