Singapore-based DBS Bank is known for having transformed itself from a local bank to global leader and winning multiple “best bank” titles. It has continued its evolution by focusing on digital transformation and building new digital products. DBS’s group head of strategy and planning is Han Kwee Juan. In this episode of the Committed Innovator podcast, Kwee Juan talks with McKinsey’s innovation leader Erik Roth about building a company culture that enables and promotes innovation. This is an edited transcript of their discussion. You can listen to the full episode on your preferred podcast platform.
Erik Roth: Welcome back to the Committed Innovator podcast. This episode continues our tour through Asia. After years of living in Asia, I wanted to bring the viewpoints and experiences from some of the most exciting innovation leaders from the fastest-growing markets in the world to our global-innovation audience.
In this podcast, we’re excited to talk to Han Kwee Juan. He is based in Singapore and is the chief strategy and planning officer at DBS. Prior to joining DBS, Kwee Juan had a 27-year career at Citibank Singapore, where he became CEO, was a member of the board, and ran many of their very successful businesses.
In our conversation, we will discuss how innovation really happens at DBS. We’ll speak about the moonshots they’ve taken, how they’ve created psychological safety, and the many steps they’ve taken on their multiyear transformation journey to become one the world’s most innovative banks.
Kwee Juan, thanks for chatting with us. We’re so excited to have you on the Committed Innovator podcast. To get things rolling, what brought you to DBS?
Han Kwee Juan, DBS: I guess from the outside in, when I looked at what was happening in DBS, it looked really exciting, with its vision of being the world’s best digital bank. I was also very curious about how the bank transformed itself from being just a local bank into one which wins “world’s best bank” awards. I thought there must be a lot of fun stuff happening here, so I thought, “Why not join them and learn about it?”
Erik Roth: As you looked at DBS and saw that it was this leading digital innovator among banks in terms of the company culture, what was most noticeable to you?
Han Kwee Juan: What is most noticeable about the organization is that at DBS, the sense of purpose and mission is very clear—not only at the C-suite level, but also right through the organization. Everybody knows what the bank is about and what the bank wants to do and how it wants to serve customers.
Our stated mission is that we want to make banking joyful, and I think to outsiders, “That sounds lofty. What do you really mean by that?” It really means that we want to enrich lives and transform businesses by providing amazing solutions and experiences in a sustainable way. The bank has a very strong sense of purpose, and we’ve got this ambition of being the best bank for a better world.
Erik Roth: Innovating and creating these amazing experiences is difficult for many of the world’s banks. Most of them would probably say it’s a real pain point, if they’re being honest. So what is the process or approach or way of working that DBS has deployed that enables this innovation engine to fire in the way you’re describing?
Han Kwee Juan: We are continuously learning, so I wouldn’t say we have reached the apex of innovation. But we did construct a framework that allows us to look at what is happening in the near future and ensure that everybody is participating in innovation. We call it an innovation pyramid. There are four layers to it: the first layer is what we call “big themes, big bets,” second is platforms, third is journeys, and the last one is intrapreneurship.
In looking at innovation and at what’s happening at the edge of technology, we decided that the top-management team has to sit down together and understand what is happening out there and then decide what is relevant for us. The field of 5G-enabled Internet of Things looks really interesting. Clean energy looks really interesting. So what do we do with them? We decided that we’re going to invest some money into all of it to understand it better.
Erik Roth: One of the complaints that many banks have is that technology holds them back. But it sounds like, for you, it’s the opposite. How does that work?
Han Kwee Juan: We were inspired by those same complaints. In a bank, the tech side will blame the business side, saying that all they are interested in is pushing for new features, while tech is interested in resiliency. And then the business side says the tech side is spending all this time on resiliency and fiddling with technology, and it complains that tech is not really delivering what the business needs and they’re too slow anyway. So we decided, “OK, stop quibbling. How about the two sides come together, own the budget, and decide what they want to do with it. Do you want to build a new product, or you want to make it more resilient?” Make a choice.
Erik Roth: We often run across companies that are eager to pursue moonshots but are afraid to make the resource allocation decision to go after them. How does DBS approach this to be sure the moonshots are sufficiently resourced and have a chance of being successful?
Han Kwee Juan: We have a group innovation council where the senior management team comes together with different platform owners. The platform owners typically are maybe three or four levels down from the CEO, and they come and present their vision for their platforms, and we debate about it. We approach it from the question of what makes sense: What makes sense to us when we look at big themes and how the technology seems to be evolving in those areas?
Then we arrive at what could be reasonable bets we want to make, and what budget they would take. Maybe you want to commit a certain percentage of it to do something by starting small. Once that is done, then we have a process called the horizon-three process. We create moonshots for each of the platforms and ask what a moonshot would look like for them, and then we work backward from there on the different developments that are required to reach that moonshot for those platforms.
Erik Roth: Tell me a little bit more about working backward that way. That’s actually one of the themes that we explore a lot with clients, as a means of derisking something—start with the desired end state and work backward.
Han Kwee Juan: I’ll take the example of a payment platform. If we ask ourselves what a moonshot for payment platforms might be, we might say the ultimate moonshot would be an instantaneous settlement of payments, 24/7, for any currency. To work backward from there, we would ask ourselves where we are today as compared to that end state, and what technological advances we need to make to get there. Then we might ask what we need to learn about and experiment with blockchain technology, because it’s got all the wonderful attributes that could potentially reach that moonshot.
Erik Roth: What are some of the other elements that define the way innovation and growth happen at DBS?
Han Kwee Juan: Customer journey is something we look at very, very closely. We often ask, “What’s the journey like for the customer?” in any products and services that we sell. And we have a process we call Wow Accelerator, which is about creating “wow” in the customer journey and how we accelerate that experience for the different journeys.
One great example that came out of that process was digitizing cash gifts. As you know from your ten years in Asia, in Singapore at Chinese New Year or Lunar New Year, people like to give a gift of blessings, which are always the red envelope or package with money in it. We call these hóngbāo in Mandarin or ang pow in the Hokkien dialect. We looked at that and thought we could improve on that. Paper gets wasted because these are only single-use envelopes or packages, and people want to use new bank notes to put in them. We have our PayLah super app, so we created a QR code with the well wishes that you can have embedded in the PayLah app and just scan it, indicate the amount, and give a QR code to somebody to send them hóngbāo or ang pow.
That was a journey we thought about in terms of reducing the queues at the bank branches when people go to get new bank notes at these holidays. It’s something you can personalize and send to people across the world on Chinese New Year, so it solves a lot of problems and makes it simple for both sides: people send a QR code to recipients, and that’s it. That’s one example of a product that came through the Wow Accelerator.
Erik Roth: What you just described involved a number of things that had to occur for that to be successful. How did DBS imagine that journey and bring it to life and have confidence that it would work, given the magnitude of the behavior change you were introducing?
Han Kwee Juan: It’s multiple steps. The first thing we did was test the QR code idea on PayLah. That is an app we started as a peer-to-peer payment platform, and it eventually became a super app where you can do almost anything. Many of the payments that occur on PayLah involve scanning a QR code. We saw the volumes there—we had two million customers using it quite actively, so why not introduce it and see whether people are comfortable with scanning a code?
Also, it’s culturally more acceptable for people to receive new bank notes, because there is an element of newness and freshness in a year. So we thought about how to play that sense of fresh and new with the messaging that customers can use when sending gifts electronically.
As in all things with technology, it takes a while to ramp up, and in year one, the adoption was okay. In year two, more people took it on, and then in year three, it just took off, in large part because the pandemic prevented people from giving gifts in person.
Erik Roth: What else changed for you when the pandemic occurred—not just in terms of how the bank operated and the incredible challenges, but also how the bank adapted its model of how to serve customers?
Han Kwee Juan: We have gone through a fair bit of digital transformation since 2010, and one of the core things we did was we said, “We’re going to be digital to the core.” And we looked to our tech stack to enable us to be nimble in the way we organize ourselves from a technology standpoint and how we deploy tech. That was really critical, because it enabled us to have a platform that serves both our employees and our customers, literally with a flip of the switch, when COVID-19 happened.
Many of the things we did prior to COVID-19 moved customers to the digital platform. Our digital platforms were already well into many years of being developed, and the journeys are pretty good, and that allowed us to very quickly onboard customers during COVID-19. Through those interactions we created, we were able to engage our customers and show them how they could do banking without being constrained by COVID-19.
One thing we did as part of this was to help with remittances. In Singapore, we have quite a fair number of migrant workers, who help us in the construction industry. And during COVID-19, when we were all in lockdown, they still needed to send money home, but they couldn’t go to the shops where they normally go to send money home. So what we did was we helped to open 40,000 accounts for these workers over a very short period of time—two to four weeks—and showed them how they could use digital banking and DBS Remit to send the money back home, whether it’s Bangladesh, India, Indonesia, or elsewhere in Asia.
Erik Roth: Did you find you invested in innovation more or less during the COVID-19 lockdowns?
Han Kwee Juan: The COVID times gave us the opportunity to ask ourselves what we could do differently or how we could use the technologies we’ve been investing in to create new businesses or new opportunities. So it didn’t stop, but it went to a different level. Instead of just innovating on existing services, we went further, to ask, “How can I use this to really up the experience for our employees such that it is good for them, because a lot of them are working from home?”
Erik Roth: How much of what you experienced and learned during COVID-19 is likely to stick now that we’re hopefully coming out of the pandemic times?
Han Kwee Juan: In the midst of COVID, we decided that whenever we exit from COVID, we will do a hybrid working environment, 60/40. We decided very early on that we are not going back to 100 percent in-office, we are going to 60 percent in office, 40 percent flexible. We’re constantly speaking with our employees and finding out how they are. We have a great culture of collaboration and caring about our employees, so we were constantly checking in with them and finding out that one of the biggest things we wanted to do pre-COVID was to get people to work part-time or even work from home and to have flexible work hours. But all that was really difficult before COVID, because nobody could imagine that they could do it from home.
Erik Roth: How has DBS thought about what the impact may be on innovation with the new 60/40 model?
Han Kwee Juan: COVID has accelerated a lot of digitization, but for us, it wasn’t about that alone. It was about creating new businesses, and we managed to do a few through COVID. But we also realized that we are all social creatures. It’s important to bring people back, which is why we landed on 60/40—to say that it is important to come back and maybe do your initial ideation in person, and then after that, we have the necessary tools and meeting discipline to allow you to continue the ideation with a hybrid setup.
Erik Roth: Do you think DBS gets an advantage in the way it’s able to experiment and do many of the things you’re describing because it’s in Singapore, with its market size?
Han Kwee Juan: We are the dominant bank in Singapore, so from a customer base perspective, it’s good. We bank all five-million-plus people staying on this wonderful country and island, and that gives us the opportunity to test quite a few concepts at scale. If you can get one million people trying something, that’s great. I guess a challenge might be that everybody on the island is already banked.
Our strategy of being the Asian bank allows us to define three other big countries we want to invest more in—India, China, and Indonesia. The populations in those countries are multiples of Singapore, just massive. Two of the world’s most populous countries are on that list. That gives us the opportunity to scale up some of the experiences we tried and tested in Singapore and say, “Maybe some of this will also work in India, China, and Indonesia.” In parts, though—obviously, these countries are very different, so not everything will translate in all markets.
We believe that transformation leadership means you first have to excite people with a vision and second create the cultural behavior that you want to see within the bank.Han Kwee Juan
Erik Roth: DBS has an innovation ecosystem. Can you talk a little bit about that ecosystem, how you engage in it, and how it creates an advantage as you drive growth and create innovation?
Han Kwee Juan: Going back to the pyramid of innovation I mentioned, this is where the bottom layer of that and the Wow Accelerator help us. When we think about journeys, for example, and in creating the Wow Accelerator, we look around and ask, “What technology exists?” or “Who has great technology that can help us solve part of that friction or problem we have encountered in trying to create an excellent and differentiated customer journey?” That allows us to then put out a problem statement and invite fintech companies or other companies to come in and tell us they have a solution they can work with us on.
The last layer of innovation involves intrapreneurship, and that allows us to bring in ideas from all our employees. Then we’ll float those out as problem statements for hackathons and for people to respond with solutions that we work with them on.
Erik Roth: A lot of what you’re describing is an artifact of great leadership. Can you talk a little bit about how leadership plays an important role in DBS’s success as being a great innovator?
Han Kwee Juan: We believe that transformation leadership means you first have to excite people with a vision and second create the cultural behavior that you want to see within the bank. There are certain things we need to do from a cultural standpoint. One is creating psychological safety—an environment where people feel safe to speak up and to challenge. We’ve got to create an environment where collaborative work is practiced and not just talked about. Be courageous in your feedback, regardless of who you’re speaking with. Have a growth mindset, because whatever we have achieved will be overtaken by somebody else tomorrow, so you have to think about what you need to learn in order to be even better than yourself today. And obviously, leaders need to walk the talk.
Erik Roth: Psychological safety is so important to getting the best creativity out of individuals. How do you integrate that at scale within or your organization?
Han Kwee Juan: I am the first to admit we are not there yet. It is a journey, and we haven’t reached the end goal. If we think of psychological safety as the equivalent of an innovation moonshot for cultural behavior, the result would be an organization with 100 percent psychological safety. We have a way of approaching getting things changed in the bank that we call BEANs, which is an acronym for behavior, enablers, artifacts, and nudges. It refers to how we think about the behavior we want to model and change.
I’ll give you an example: meetings. All of us are in meetings all day long, and meetings are where psychological safety is being practiced. So we created a program called MOJO, where the MO is the meeting owner and the JO is a joyful observer. So MO is the guy who calls a meeting and will assign a JO at a meeting. If you are the JO, your job is to call out any behavior that you think is inappropriate, to keep the meeting on time, and also to say, “I haven’t really heard anybody challenging anything that’s being said.” The JO has the power to make an evaluation at the end of the meeting, to say how it went, and might say, “I think it was a great meeting with a lot of participation, and people were able to speak up,” or “I think we were so-so, and in some parts, people were shut down and didn’t really have a chance to challenge what was being said, and I think we could do better than that.”
Erik Roth: That’s fascinating. Talk more about how you encourage a growth mindset in the DBS world. Han Kwee Juan: I think a growth mindset is really about curiosity. This includes curiosity not only around what is happening on the technical side of your job, but also around how you have impact on others and how you can change your behavior to create an even better environment in the bank. If I’m a leader, then growth mindset also means evaluating how I can lead my people better and engage them better. There is a multitude of things that go into a growth mindset. It’s just not just a tagline of “growth mindset”—it involves the very being of you, the technical side, how you interact, how you lead, and your impact on people and society.
Erik Roth: Many organizations want to transform themselves—how can leaders translate their transformational vision into something that a bank can go and execute?
Han Kwee Juan: I think for us the magic is in the scorecard that we set up. There are three parts to the scorecard, and 40 percent of it goes into the usual financial, employee, and customer metrics. Those are the hard numbers that every organization would have. But we say that these numbers constitute only 40 percent of the appraisal of how you’re doing. And in the middle of the score card there is 20 percent for what we call “make banking joyful,” and that’s where we transform many of our activities into asking, “What does it mean to have a differentiated customer experience?” and “What are the things we have to do and manage differently?”
And then the bottom 40 percent is what we call “area of focus,” and these are areas that we say are important for the bank and the longer-term things that we want to achieve. We break them down into smaller chunks, and then ask, what does that look like within the year from a progress standpoint? The score card gets changed based on the progress that we made on transformation, and key strategies we are going to execute and get to in the next stage.
I go back to the scorecard because it’s what allows us to have conversations around progress within the year, and it serves as a strong compass for people. What we put on the scorecard gets cascaded down throughout the whole organization.
The other thing that we also feel is important is being a data-driven and AI-fueled bank. As you said, many of these things require data and so we help our teams to think about what the key metrics are that they should look at for their businesses. We call this a data-driven operating model: we identify the core drivers that people should look at, and use data, AI, and machine learning to provide them the data sets they’ll need, rather than having them spend time trying to pool the data themselves, which is quite laborious.
That’s something that I’m really excited about: marrying the possibility of what technology can bring with what it can deliver to the end customers. It would be amazing if, as a customer, I have a thought on something that I like, and then I receive prompts or suggestions based on it that lead me to say, “Wow, how do they even know that this is what I’m thinking?” That could be seen as being creepy, but imagine if it is done in a manner that is really quite seamless in your life. You would say, “Wow, that’s amazing!”
Erik Roth: I want to thank you very much, Kwee Juan, for your time, your insights, and your perspectives. I really appreciate your joining us this evening.
Han Kwee Juan: Thank you. It’s been fun.