DBS Transformation (a): Becoming a World-Class Multinational Bank

Abstract

AUGUST 1, 2013. Piyush Gupta, CEO of DBS, had just announced that the bank was walking away from its bid to acquire Indonesia's Bank Danamon. This was a major setback to the bank's plans to expand its presence in Asia's growth markets. Looking back, however, he was still satisfied with the results of the transformation he had initiated on joining the bank in November 2009. A lot had been achieved and a lot remained to be done. The once underperforming bank was now performing well. Progress had been made on all three central objectives-getting strategic alignment, fixing the plumbing (ensuring the operational and technological architectures supported effective and efficient management decision making), and getting the culture right. The bank had aligned around the goal of being the Asian bank of choice, was about two-thirds of the way toward fixing operations and technology issues, and was about one-third of the way along in terms of changing its culture. With DBS's transformation journey well underway, it was this, rather than the setback to the expansion plans that Gupta chose to focus on now. DBS had not materially increased its presence in the small and medium-sized enterprise (SME) or mass affluent markets in the Asian growth markets of China, India and Indonesia, where DBS already had a footprint. With the high costs, regulatory uncertainty and scarcity of suitable targets, acquisitions might no longer be a viable path to growth. He felt it was time to reconsider the bank's overseas growth strategy. He was also concerned by the growing threat fintechs represented. They were beginning to compete with banks to deliver many of the same services without expensive branch networks or legacy technology issues. He believed they would be formidable competitors within five to ten years, and doing nothing in the face of that development could be fatal. DBS needed to assess its position against the rising fintech tide and reflect this in its strategy. DBS's executive board was meeting later that day to discuss these two key questions. Making the right call on these issues would be critical to the bank's future.