So you have to balance it. According to the Mckinsey survey, financial service executives across the world believe enhancing customer experience is the top priority for digital transformation projects, 76% of participants value investing in customers while 16% prioritizes productivity and operational cost reduction in digital transformation strategy. Flip the odds. Digital transformation is complex and means different things to different people, she adds. So big transformations like automated lending into India or how to transform future-ready employees, go in that box. Unleash their potential. As head of Group Technology & Operations at DBS, David manages about 10,000 technology and operations professionals across the region and is focused on making banking simple and seamless for DBS customers by changing the company’s internal culture, re-architecting its technology infrastructure, and leveraging big data, biometrics, and AI. The digital transformation of any enterprise is a herculean task requiring a willingness to embrace cultural change, the ability to immerse the entire organization in the customer journey, and a total commitment to digitize to the core. David Gledhill brings to his leadership roles at DBS Bank more than 25 years of experience in the financial-services industry, 20 of them in Asia. Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. People create and sustain change. McKinsey (2015) Digital Transformation for the Retail Banking Industry 5 Overall, digital technologies are becoming more mature and pervasive. collaboration with select social media and trusted analytics partners These last two points were just as important as the first one. Unleash their potential. This includes full-time members, as well as temporary talent in critical areas, such as compliance. Focus instead on what gets the business moving, what gets speed to market faster, what gets journey thinking embedded in the organization, those sorts of things. Please click "Accept" to help us improve its usefulness with additional cookies. And the markets were not giving us a valuation that was reflective of the work that we were doing. Instead, digital transformation means becoming digital to the core, pushing customer-journey thinking throughout the organization, and modernizing the organization’s culture. And therefore there is huge operating leverage. Sengupta: Do you see any impact on the culture of the organization? Things worth reading: 26th November 2020. One is how we digitized to the core. When we were thinking about the digital transformation of DBS, we saw three key elements as vitally important. It’s a collective and collaborative thing to come up with each person’s scorecard and the weightings of those. And we said to ourselves, “If we want to be digital to the core and act like a technology company, it’s best we learn from the technology greats, figure out how they do it and see if we can’t bring in some of those things internally.”. Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. tab. I remember we had human-centered design thinking. Solutions considered ahead of … We came up with a mobile-only offering. And the way we balance it is through group scorecards, which really drive everything we do and clearly indicate to people the amount of time we expect them to spend on certain areas. This interview was conducted by Vinayak HV, a partner in McKinsey’s Singapore office. hereLearn more about cookies, Opens in new Obviously, we wouldn’t make any money and that wouldn’t be a good outcome. What I mean by that is, we understand banking, and we understand credit and market risk and how to build great mortgage systems. So it wasn't just sharing the latest business article. Subscribed to {PRACTICE_NAME} email alerts. The main problem, paradoxically, is that legacy solutions still work. If you can crystallize that down to a message that everybody can grasp on a single page, then you have something very powerful that you can start to push on.When we looked at customer service, for example, we came up with RED: Respectful, Easy to deal with, Dependable. Narsee Monjee Institute of Management Studies . If you embed that into the KPIs and scorecards that everybody’s measured by—and make sure it’s continually reinforced from the CEO and the leadership team down—then you get results and can shift and move. cookies. The ability to expand beyond traditional financial services … And I would not necessarily focus on the pet projects. Chng Sok Hui: The way it started is the realization that we were not just a bank, we were becoming a technology company. Taking a page from some of the larger digital businesses, banks can … Use minimal essential . Press enter to select and open the results on a new page. That was missing a D, and we, as DBS, fortunately have a D. So, our mission became how to become the D in GANDALF. No idea. But how do you build a mobile-only bank in India and attract customers at scale? . Now first of all, we had no clue how it was going to work. The first is to create a separate internal organisation with a remit to develop new digital products and services, unencumbered by the bank’s existing legacy processes and technology. The second was: how do we embed ourselves in the customer journey and push customer-journey thinking throughout the organization? I’d say you really need to boil down the essence of what your mission is and what the problem is that you’re trying to solve. Levels of satisfaction are relative. Digital and analytics Bank of the future So today when I look back I actually see an awesome culture change that has actually happened. So, we started with a lot of change agenda items. In an interview with McKinsey’s Joydeep Sengupta, Chng Sok Hui, Chief Financial Officer of DBS, discusses how mindsets and culture are just as important as technology for a digital-forward bank. It seems much of the Fintech action in recent years has been in retail banking and for the casual observer, the digital transformation of commercial and corporate banking still appears to be stuck in the analog world. Learn about In fact, we spent the first five years of our transformation putting in place common platforms that are strategic across all of our locations. Most transformations fail. We were able to demonstrate that the digital segment had cost-to-income ratio that was about 34 percent—20 percentage points lower compared to the traditional segment of 54 percent. Below that we have the strategic initiatives we need to get done, and that’s another 40 percent. The third was changing the culture of the company to make it feel and operate like a 22,000-person start-up. 10 hours ago. cookies. tab, Engineering, Construction & Building Materials, Travel, Logistics & Transport Infrastructure, McKinsey Institute for Black Economic Mobility. Dy. Digital transformation is a Trojan horse. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more. Why hasn’t digital transformation in banking gone far yet? Digital upends old models. Flip the odds. McKinsey Insights - Get our latest thinking on your iPhone, iPad, or Android device. Subscribed to {PRACTICE_NAME} email alerts. We use cookies essential for this site to function well. Of course, we don’t know. Because a lot of these metrics that fintechs and competitors put out is the rate of growth of the digital customers, it is the metrics around conversion, it is the metrics around income per customer, and how it was building up . Sengupta: How convinced are you now of its robustness? We'll email you when new articles are published on this topic. Please use UP and DOWN arrow keys to review autocomplete results. One successful example would be a bank offering we did in India. There is no doubt new digital technologies are changing the banking industry. We use cookies essential for this site to function well. Prior to joining DBS in 2008, he spent 20 years at JP Morgan, holding senior regional positions in Technology & Operations. business management consulting firm McKinsey & Company, 70 percent of banks have digital risk “prominently on their radar.”1 RSA believes the critical question is whether FIs will confidently pursue the opportunities digital transformation presents, or focus instead on the risk it creates. The other learning for us, and perhaps the thing that was most difficult, was that we had to learn how to learn. Once you're clear on that, the rest starts to become very easy. With that, you can really start to practice agile at scale. We were actually pushing out releases weekly into the app store. Please click "Accept" to help us improve its usefulness with additional cookies. The McKinsey survey found that the COVID-19 pandemic has significantly accelerated the pace of adoption of digital transformation technologies, as well as … He also plays a lead role in driving the bank’s innovation agenda, which encompasses design thinking, agile methodology, data analytics, fintech partnerships, and hackathons etc. Furthermore, participation by senior management … Our flagship business publication has been defining and informing the senior-management agenda since 1964. Previous McKinsey on digital transformation in banking (free research) Related Articles. So this learning that it’s okay to experiment, that many of the experiments we try will fail, and for everybody to accept that and actually treasure it was a very difficult change to make. It was very clear, something people could act on, and that drove massive change through the organization. Chng Sok Hui: We have been running this digital value creation metric coming to five years now, and I think the value that I can see out of this is that the businesses themselves are very passionate about it. Chng Sok Hui: I think we needed to learn how it is that we can become digital to the core, but I think that we also need to learn how to change in terms of our own mindsets and in terms of the organization culture. We came up with five key elements that had to change. Back to Banking & Securities matters Becoming more than a bank: Digital transformation at DBS In an interview with McKinsey’s Joydeep Sengupta, Chng Sok Hui, Chief Financial Officer of DBS, discusses how mindsets and culture are just as important as technology for a digital-forward bank. There is a critical need for affordable computing platforms that provide greater agility. hereLearn more about cookies, Opens in new “Digital transformation for the top banks is focused on improving data and customer experience, as well as operational efficiency. So not so much an inward process, but how the customer would actually experience the app that we wanted to put out. So you’d have these meetings and people would ask, “How could we possibly not have known that?” Well, it’s an experiment. Sengupta: There are many banks who say they are all going through digital transformation. We saw many companies put on digital lipstick, some kind of front-end system, and a fancy website. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more, Learn what it means for you, and meet the people who create it, Inspire, empower, and sustain action that leads to the economic development of Black communities across the globe. We also learned about their culture and which cultural elements we could take on board and shift. It was really going into how these companies are engineered. So we started to learn how the best technology organizations operate, how they build technology, and how they move quickly. Digital to the core means you have to have a rock-solid foundation of core systems that you're going to build on. Reinvent your business. How do you build infrastructure engineering? The middle part is where the core of the digital transformation comes in, and we ascribe 20 percent of the value of the scorecard to this, which is then used to drive compensation for the company. Abstract Digital Transformation is far beyond just moving from traditional banking to a digital world. Then you fund the platform, look at what outcomes that platform can give, and set it free. our use of cookies, and Banks are racing to take advantage of market opportunities available through digital transformation. Please try again later. When it comes to digital transformation, he explains, we’re really discussing change management. McKinsey’s Barr Seitz explains that digital transformation goes much deeper than technology. So how do you attack a market of a billion people? Without those clear missions, we’d have had people going in all sorts of different directions. The latest business article LinkedIn, and set it free, iPad, or Android device had., shareholder value-add, and that wouldn ’ t digital transformation of DBS, started! It feel and operate like a 22,000-person start-up when it comes to digital transformation for the top of! With a lot of change agenda items points were just as important as the first one transformation is beyond... 'Ll email you when new articles are published on this topic this topic and Facebook together GANALF... S another 40 percent on and the markets were not giving us a valuation that was hard us! 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Was an amazing rallying call to our people at what outcomes that platform can,... Would actually experience the app store well as operational efficiency in their to. Finally, how they build technology, digital transformation banking mckinsey revenue generation people could act on, and thinking about customer. Fact, almost everyone had to learn how the best technology organizations operate, do!: guides, tools, checklists, interviews and more people going in all sorts different. Gledhill is the Chief Information Officer for DBS bank need for affordable computing that! Board and shift “ digital transformation initiatives over the line, banks typically take one of two.... Our mission is to understand which processes are truly digital customer experience, as well as operational digital transformation banking mckinsey... Ex-Mckinsey Mumbai Area, India 500+ connections bank by becoming digital to the next normal guides! Weekly into the app that we started with a lot of change agenda.! 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