Economic models key to DBS Bank’s digital transformation strategy

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David Gledhill, the global CIO at DBS Bank in Singapore, has taken digital business transformation by the horns — overhauling the technology stack, experimenting with artificial intelligence and pushing a purely digital banking product into a new market. A key component of Gledhill’s digital transformation strategy was to construct models to measure the economics of processes so new that they often have no baseline data.

In this SearchCIO video interview, filmed at the recent MIT Sloan CIO Symposium in Cambridge, Mass., Gledhill expounds on the bank’s digital transformation strategy that he helped forge, and he highlights the importance of quantifying the economics of doing business digitally. Below are some interview highlights with Gledhill, winner of the 2017 MIT Sloan CIO Leadership Award; click on the player to see the interview in its entirety.

What does DBS’ digital transformation strategy look like?

David Gledhill: At DBS, we saw the transformation in three big chunks: The first was that we weren’t just going to put digital lipstick on. We wanted to really re-engineer the bank right down to the core — a big transformational change of all of our technology.

The second is we really wanted to drive this thing about customer experience. And so we have this mission that we established a few years ago that we call making banking joyful: How do you create joyful banking experiences for customers delivered digitally?

And third, we wanted to try something different and hard: How do you break away from the normal mold of what typical banks do — just adding a little bit of stuff onto their existing product suite?

That was our adventure in the last year. We decided that we were going to launch a purely digital bank in India, which is a market we had virtually no presence. That’s a bank on a mobile phone. There is no internet bank, there is no physical bank, no branches, no anything. It’s purely digital.

And our aim was to see whether a digital bank could actually gain traction and customers and deposit base and start to become the bank of choice for many Indians.

Artificial intelligence technologies figure large into your digital transformation strategy. How do you measure the ROI on AI investments?

Gledhill: You have to come in with the belief that technology wins, and anything you can do to eliminate people from the equation will ultimately win. So, when we created this AI chatbot, did we have an ROI? Did somebody go through the details and calculate specifically how much money that was going to save us? Well, no, not really.

Our goal was to create a bank with no people. That meant we had to push an experiment with AI. What we’re seeing, though, is from an economics perspective, we do have, now, very well-developed economic models around transformation to digital.

How did DBS develop economic models around digital transformation?

Gledhill: When we were trying to develop an economic model for what the digital bank economics look like, there was nowhere to go. You can’t pull a textbook off of the shelf and do it. There are no industry standards at all. So, we had to build it ourselves completely from scratch. And it was a nontrivial exercise.

It took us the best part of a year to go and figure out what defines a digital customer.

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