essential for banking

Case Study

Time to market for new offshore

currency products reduced from six
months to three weeks

“We are handling a lot more volume for

the same head count. Our processing
is much more efficient.”
Sandra Stonham, Managing Director, Technology and Operations, DBS
Avaloq at DBS
Gaining efficiency and
reducing time to market

DBS demands the best technology to Introduction

DBS is a leading Asian bank and financial services group. It is
support its distinctively Asian style of based in Singapore, but it now has 19,000 staff, and over 250
private banking and wealth management branches in 16 markets. DBS is profitable and growing fast, with
current revenue of more than SGD 7.6 bn (USD 6 bn), and it boasts
in the world’s fastest-growing markets. “AA-“ and “Aa1” credit ratings, among the highest in the Asia
Pacific region. DBS was named “Asia’s Best Bank” in 2012 by The
Banker, and its strong capital position has won it Global Finance’s
When DBS, the pace-setting Asian bank, “Safest Bank in Asia” accolade every single year since 2009.
replaced two separate private banking
DBS positions itself as being distinctively Asian. Its mission is “To
systems in its two biggest markets, be the Asian bank of choice for the new Asia” and it already has
Singapore and Hong Kong, it laid the growing businesses in China, India, Indonesia and Taiwan. The
bank has nine published strategic business priorities, including
foundations for growth into new segments, particularly strengthening its wealth proposition and enhancing its
new services, and new product ranges. technology and infrastructure platform. These two key elements
coincided in 2008, when DBS took on the challenge of upgrading
Improvements in productivity and straight- its private banking capabilities in its two main centres of wealth
through processing were important, but this management activity, Hong Kong and Singapore.

was a change that went further, opening up The Situation at DBS

wholly new business possibilities in some of At the bank’s Singapore headquarters, private banking and wealth
management were supported by a home-grown, organically
the world’s most competitive banking developed system which had clearly reached the limits of its
markets. capacity and capabilities. In Hong Kong, the private bank business
had grown by acquisition, bringing with it a completely different
system that was unlikely to be able to adapt to the bank’s future
needs.

The need for change was becoming urgent, as the size of the client
base and the potential opportunities for more sophisticated service
“Time to market is very important offerings grew.

in this business”
Olivier Crespin, Chief Operations Officer, DBS
There was a significant opportunity to improve STP rates and After assessing its current and future requirements and the options
improve the time needed to bring new products to market, but available in the marketplace, DBS selected the Avaloq Banking
both existing systems were inadequate to support the bank’s Suite to provide the integrated and flexible solution needed to
growth. Sandra Stonham, DBS’s Managing Director, Technology underpin its planned development.
and Operations, describes the existing systems as “systems that
weren’t really fit for purpose” in these fast-moving markets. The Avaloq Implementation
Implementation plans quickly focused on delivery of an advanced
Olivier Crespin, Chief Operations Officer for Wealth across the set of capabilities offering better credit handling, real-time
whole of DBS, was equally well aware of the need for systems information, performance reporting, portfolio management tools,
capable of delivering real-time insights and that were flexible and at and front-to-back functionality. A road map was developed that
the leading edge of client output. showed how the platform could quickly evolve beyond the basic
system to provide enhanced STP, integrated internet banking, and
”We saw a big opportunity through the upgrading of systems to discretionary portfolio management services.
build our capability to react to relevant information in real time,” he
says. “Time to market is very important in this business.” “Avaloq’s business experts had a clear idea of what could be
done at DBS,” says Sandra Stonham. “We still had to make some
The ability to launch new products quickly was particularly customisations to the system, but the Avaloq specialists were very
important as the external environment was also changing fast. clear about what it could offer and how we could structure it and
New regulatory demands were affecting banks in Asia, and many get benefits from it. “
banks were finding it difficult to adapt. The rules were becoming
more complex and stringent regulations were being introduced that The implementation of the Avaloq Banking Suite in Hong Kong
required banks to track concentrations of assets and to monitor took 18 months from start to finish, with Avaloq assuming the lead
whether a particular product was suitable for a particular client. role. Hong Kong came first because the regional private banking
Compliance demanded powerful, agile technologies that could business was run from there, and because the Hong Kong booking
operate efficiently within the new environment and adapt to future centre was smaller than its Singapore equivalent, making this the
developments. least risk approach.

The changes were causing many banks to struggle, but DBS Later, when it came to the Singapore implementation, the positive
saw the upside potential. Activities like the monitoring of credit experience gained in Hong Kong allowed the whole job to be
facilities against collateral calls for swift actions based on real- completed in just 13 months, with DBS staff leading the project
time information, and the bank recognised that this real-time and Avaloq providing support. The DBS team was able to benefit
information could support new insights and understanding that from utilising the built-in process structures within the Avaloq
would enable risk levels to be reduced. Banking Suite and its “model bank” templates, rather than trying to
replicate historical process flows.
Even with the benefit of a comprehensive vision, though, no DBS has worked hard, over the last couple of years, to integrate
implementation ever delivers a banking system so perfect that it the private bank with its larger consumer retail operation. It has
can’t be improved. A major strength of the DBS implementation created a new segment, called DBS Treasures Private Client, to
has been the ability to adapt and develop particular aspects of look after clients with assets of SGD 1.5 million to SGD 5 million,
the platform quickly and easily, without the need for extensive and now sees its clients as being on a “wealth continuum”
IT support. Refinements and adjustments are constantly being that leads seamlessly from basic retail banking through to the
made, fine-tuning the system to enhance different aspects of its full private banking service. The Avaloq Banking Suite was
performance and productivity. successfully leveraged to accommodate the new segment in
a smooth, swift implementation that took just six months. The
“We handle 220 enhancements a year,” says Crespin. “That’s a same process is now being adopted for another new customer
key advantage – the ability to move fast when something comes segment, called DBS Treasures, that addresses the needs of
up or we see an opportunity.” the bank’s mainly younger clients in the SGD 200,000 to
SGD 1.5 million bracket.
The Results and Benefits
Some of the business benefits DBS has gained from the new The payoffs from installing the new system are clear. Front line
system, like the overall increase in productivity, are easily staff are able to spend more time with their client and hold more
quantifiable. Stonham points to efficiency improvements helpful conversations with them, leading to happier clients.
that began to show through straight away, as soon as the first Support function synergies have lowered costs by at least 10
implementation went live. percent. But, as noted, there is also a broader business benefit
at a more strategic level. Moving up to a new generation of
“We did the analysis in Hong Kong and found we were handling technology with the Avaloq Banking Suite has allowed new
a lot more volume for the same head count,” she says. “Our products and services to be introduced quickly and easily to meet
processing was much more efficient.” the changing needs of the Asian market. This has enabled DBS to
appeal to more clients and to maximise the long-term value of its
When DBS introduced its new offshore Chinese currency existing customer relationships.
products, in February 2011, it was able to move extremely
quickly. In earlier times, a completely new product range like this
would have taken half a year to launch, but DBS was ready to
go live in just three weeks, with a renminbi (RMB) term deposit
account, current accounts, and FX and remittance services.
These were swiftly followed, just one week later, by RMB bonds,
funds and unit trust offerings, dramatically underlining the new
system’s ability to reduce time to market.

The DBS team has also been able to increase the amount of
processing that occurs without manual intervention in many
parts of the business. Interfaces between the new system and
specialist platforms used by other parts of the bank – including
brokerage and forex platforms and treasury systems – have
allowed DBS to take work out of the system, making operations
more efficient and improving STP rates.

“Another example is the release we had recently where we did “There really are many different
many new things around corporate action processing,” says
Stonham. “We have been able to make that much more STP, so areas where we have become
we’re ramping up the percentage of corporate actions we can
process without any intervention. There really are many different more efficient”
areas where we have become more efficient.”
Sandra Stonham, Managing Director,
Technology and Operations, DBS
About DBS About Avaloq
DBS is a leading financial services group in Asia, with over The Avaloq group develops and operates fully integrated front,
250 branches across 16 markets. Headquartered and listed in middle and back office solutions, as well as online and mobile
Singapore, DBS has a growing presence in the three key Asian banking applications for retail, wealth management and universal
axes of growth: Greater China, Southeast Asia and South Asia. The banks. The company provides leading business process and IT
bank's capital position, as well as "AA-" and "Aa1" credit ratings, outsourcing solutions in Switzerland (B-Source) and in Germany.
is among the highest in Asia-Pacific. DBS has been recognised The company, with its headquarters in Switzerland and branches
as “Asia’s Best Bank” by The Banker, a member of the Financial in the most important financial centres worldwide, employs 1,400
Times group, and “Best Managed Bank in Asia-Pacific” by The highly qualified banking and IT specialists and has a customer base
Asian Banker. The bank has also been named “Safest Bank in Asia” of more than 100 banks.
by Global Finance for five consecutive years from 2009 to 2013.
For further information, please visit www.avaloq.com
DBS provides a full range of services in consumer, SME and
corporate banking activities across Asia. As a bank born and bred
in Asia, DBS also understands the intricacies of doing business
in the region’s most dynamic markets. These market insights and
regional connectivity have helped to drive the bank’s growth as it
sets out to be the Asian bank of choice. DBS believes that building
lasting relationships with its customers is an integral part of banking
the Asian way.

With its extensive network of operations in Asia and emphasis on

engaging and empowering its staff, DBS presents exciting career
opportunities. The bank acknowledges the passion, commitment
and can-do spirit in all of our 19,000 staff, representing over 30
nationalities.

For more information, please visit www.dbs.com

01/2014

www.avaloq.com