Overview of Development Bank of Singapore
Question:
Discuss about the Development Bank of Singapore.
Development Bank of Singapore is banking and financial organisation that operates its business globally. Development Bank of Singapore is headquartered in Marina Bay, Singapore (Serrat 2017). The bank was formed in 1968 by the Singaporean government to handle all the financial and monetary transactions and related activities from the Economic Development Board (Dbs.com.sg 2018). Development Bank of Singapore is considered as one of the largest banks in the South-Eastern part of Asia region in terms of assets. Development Bank of Singapore provides financial services like Retail Banking, Private Banking, Wealth management, corporate banking and Investment Banking. The organisation earned an operating income and annual revenue of $4.95 billion and $ 10.89 billion respectively in the year 2017. In 2016, Development Bank of Singapore earned a net income of US $3.07 billion (Emery 2018). Currently, the organisation provides employment to 22,194 employees in the organisation (Dbs.com.sg 2018).
The Bank of Singapore is one of the famous and largest banks in the world. It has occupied a huge amount of market shares due to the strengths of the organisation and at the same point, the organisation is facing tough challenges and has suffered the loss in many occasions due to some of the weaknesses that the organisation has. SWOT analysis will help to understand and identify the key Strengths and the Weaknesses of the organisation.
Development Bank of Singapore has a strong position in the market of Hong Kong and Singapore (Rich 2014). The organisation provides diversified services and products that help them in generating a huge amount of revenue. Development Bank of Singapore has earned a huge amount of goodwill when the organisation was awarded for ‘Safest Bank in Asia’ and ‘Best Bank in Singapore’ (Hill and Menon 2014). Development bank has a global presence and is expanded to 15 countries, the organisation is also has a huge customer base and serves to more than 4 million customers globally.
The dividend, which is earned by the Development Bank of Singapore, is relatively higher when compared to the score of another financial sector (Acharya, Viral and Shin 2017). Development Bank of Singapore also occupied a huge amount of market shares in Singapore that makes them one of the most reputed and investor attracted organisation in the market (Dbs.com.sg 2018). The market in which DBS is operating is suitable for the financial industry. Asian countries are growing rapidly and they are the global hub for many financial institutions (Vogel 2014).
Asian countries like Singapore, Hong Kong, China are growing and they are attracting many local and foreign investors in their country, which is a perfect opportunity for Development Bank of Singapore to expand their business in the organisation (Dbs.com.sg 2018). Singaporean market is filled with experienced and skilled employees and this is plus point for smooth running of the organisational functions. The organisation provides effective and conservative business policies that help them in attracting more customers. The Development Bank of Singapore is a very old organisation established in 1968, they have a huge amount of experience in the industry.
SWOT Analysis of Development Bank of Singapore
Singapore is one of the largest and fast leading economies in the world; as a result, the country is a global hub for many financial institutions. This has increased the competition for the existing banks like Development Bank of Singapore. Singapore has also attracted many foreign and local banks in their financial industry (Fu, Lin and Molyneux 2014). Development Bank of Singapore failed to penetrate the market outside Asia. DBS failed to penetrate the market of European and the American nations.
Penetrating those countries would have helped DBS in expanding their business all over the world (Hartwell 2013). Financial Technology companies are changing the concept of banking providing an easier way of transacting using the internet facility. Fintech companies are acquiring the market of existing banks and this is affecting DBS on a large Scale (Dbs.com.sg 2018). The expectation of the customer from the financial industry is increasing day by day. Financial institutions are facing a huge problem to fulfil all their demands and when the bank is not able to fulfil their demands, they shift another bank.
Though DBS has very flexible policies for their customer, still they are facing many problems in fulfilling the customers need. Banking sectors are not gaining a huge amount of return on investment. Despite the hype that DBS is a leading financial institution, they are acquiring a very low return on equity (Dbs.com.sg 2018). This is also affecting the shareholder’s trust in the company.
The value chain analysis of the banking sector is unique. The uniqueness signifies in the work and also means the industrial feature for the development of bank (Dbs.com.sg 2018). As banking sector in Singapore is quite supportive, thus better chances of business proactivity will surface the process. Client is the sole delivering factor of processing and that is the reason supplier and Buyer these two extreme important sections that manages client.
Value chain analysis has five sections like inbound logistic, operation process, outbound logistic, marketing and sales, and services. This is the primary activities that impacted on DBS, as the process management and banking operation are the major process to make deal with clients. The logistic in case of inbound and outbound linked with the support activities like technology (Hill and Menon 2014). Better technology helps the logistics process smoother. In case of bank, the logistic process of money lending of money transfer from the main centre need some smooth process and security and that is the main support process of technology to boost the process. In case of firm infrastructure, that highlight the sales process and increase number of sales and account open will help to make more business in Singapore. The banking facility is such things that initiated by the most of the people in Singapore, so better business opportunity is there and that needs to be formulated by the Human resource department (Hartwell 2013). This is one of the most crucial steps in support activities as the section of HRM needs to be string in bank so that services will be fine and clients get good outcome through the process (Moosazadeh et al. 2016). A genuine HRM manager takes care of that and procures the process is a suitable way to measure the situational position they are in and at the level they place their mark in future. There is some service management process like the use of marketing and the process of advertisement are important in this process. The sales department of DBS deals with the acquisition, offering, multi process management also. The product and service has three segments like funding, investment and services as a whole (Ho 2014). The processes are important for the credit, securities and corporate investments. The process of supplier buyer relationship is the most important for the development of general people. In Singapore, as all the infrastructural quality is high in nature and corporate assisting is there, so it will be important to have client management procedures.
Value Chain Analysis of Development Bank of Singapore
The business expansion need people engagement and the business scope delivering those linked between the market linkage and that is the reason this value chain is important for DBS.
PEST analysis will help to understand the Political, Social, Economic and Technological factors that influence Development Bank of Singapore (Ho 2014).
Political factors:
Political stability is one of the important aspect in which the business based on their ground. If the positing nation and their government assistance are not gettable by the penetrating company, then associates marketing are crucial in that case and some difficulties need to be faced by the organisation. Political stability affects the banking sector heavily because the government sets particular rules and policies and if the frequency of change in political leader is high, the policy changes are high that affects the banking sector. However, Singapore has a good political stability and it does not affect Singapore’s financial industry heavily (Tremewan 2016).
Foreign and local investment: Singapore’s economy is attracting many local and foreign investors; this is helping the growth of the Singapore’s financial sector. Foreign investments have increased the business activities, which helped DBS on a huge scale (Newell, Pham and Ooi 2015).
Economic factors:
Funding profile of Singapore: The funding profile is very strong in Singapore. This is due to the developed economy of Singapore and also because of the huge number of investors. This is one of the reasons why every financial organisation is selecting Singapore to headquarter their organisation. This has helped DBS to expand and make a strong base of operation in Singapore (Dbs.com.sg 2018).
Labour cost: In recent years, Singapore is highly facing the problem of increased labour cost. This affects the organisation by cutting down the cost advantage.
Social factors:
The rate of intent for starting the business in Singapore has increased 20.3% as people are engaged in a right way (Dbs.com.sg 2018).
New clients are hoping to start their business as the process of incubation, knowledge sharing and mentioning the factors are the concerned process that helps to find more engagement in the social aspect.
Improving and rising social states of enterprise situation is another initial process of this social entrepreneurship service. The culture of materialism and hard work is the influencing factors that encourage the development of the Singapore economy. The skilled labours are the key asset for the organisation and they deliver their best in the improved scenario of Singapore.
Technological factors:
Introduction of Digital Banking: One of the main reasons for the success of the financial industry in Singapore is the increased connectivity and improved communication. Proper and advanced IT infrastructure in Singapore helped DBS in providing better and accurate services to the customer.
Efficiency: Development Bank of Singapore is one of the financial organisations among very few organisations that have implemented the Infocomm technology (Dbs.com.sg 2018). This has helped in increasing the efficiency of ATM in the country and also resulted in the customer satisfaction.
Business expansion: Development Bank of Singapore can expand its business outside Asia. European and American countries can be very useful for their business as they have a good economic stability and a higher GDP (Dbs.com.sg 2018).
Adapting to the E-Banking: Development Bank of Singapore should try and adapt to the E-banking strategy, which will help them to compete against the Fintech companies. The E-banking has also increased the customer satisfaction level that has helped the financial institutions (Shim 2013).
The increased competition between the foreign banks in Asian countries and mainly in Singapore has affected the Development Bank of Singapore. Fintech companies are a major threat as it has already acquired a huge number of customer bases. Economic downfall or recession or any change in government regulations may have a negative impact on the business operation of DBS (Dbs.com.sg 2018)
Stakeholders are those individuals who have interest in the company’s business process and who can be affected or affect the business organisation. Stakeholders can be of two types, either internal stakeholders or external stakeholders. Internal stakeholders are the people who are committed to serving the organisation for example board members, volunteer, staff or donors. They are already committed to the business organisation. External stakeholders are those people who are impacted by the organisational processes. Clients, community, constituents, partners are some of the examples of external stakeholders.
Employees: Employees are one of the main stakeholders of the organization, as they carry out all the business process in the organization. The employee of a bank like DBS should be highly skilled and knowledgeable about every rules and regulation of the company (Dbs.com.sg 2018). The employee of the organization should have a strong bond with the customer, as the customer-employee relation is very necessary for Singapore’s competitive market.
Board members: Board members are important stakeholders for DBS as they set all the policies of the organisation. All the operations of the organisation are highly dependent on the board members policies (Moosazadeh et al. 2016). The board members set those policies by considering all the different legal rules and regulations, market demand, competitive rivalry, threats of new entrances and other different factors.
Clients: Clients or customers are the external stakeholders and satisfying these clients and keeping these clients into their organisation is the main of the financial institution. The board of directors also set policies considering what the clients want from their organisation. Clients are the main stakeholder of DBS.
Partners: Partners or subsidiary companies are the external stakeholders of the DBS. Partners are highly affected by the actions of the organisation (Dbs.com.sg 2018).
Shareholders: Shareholders are the key internal stakeholders of DBS. They invest in the organisation by buying shares of the organisation and expect a huge amount of return on investment.
Shareholders matrix
The importance of shareholders for the sustainable business process is important and these stakeholders are important to hold the business up. Consumers don’t segment in the fatalities if any of the existing company practices them, so they also don’t segment in the incomes. But shareholders do. The incomes and losses practiced by the company are theirs unaided. Anyone who needs to share in company’s profits is comfortable to buy dividends. But they want to be equipped to take the sufferers, too. The classifying and identify those people and impotent for the organization (Hill and Menon 2014). Local government, customers, employees, local community, funding bodies all these sections are under the stakeholders’ genre. The internal market signifies the office employee and shareholder who invest money for the process. Supplier market is another shareholder and they involved with the shareholder case of the bank and that keep informed process (Moosazadeh et al. 2016). The high power end signifies the customer market and referral market where the maximum revenue can be earned. The minimal efforts are the process where the situation is being influenced by another aspect. In that case, influencer markets and recruitment is the key process to deal the situation. The last one is the key player and that provide the high power and high interest in shareholders. Customer expectation from the bank and the increase of competition set the parameter in that case and that will be effective for the business acceleration and for the movement of power intense shareholder matrix in business.
Insufficient revenue: Despite having the hype about the banking sectors profitability, financial institutions and banks are not getting sufficient amount of return on investment or equity. The shareholders are not getting their expected return on investment and they are losing faith from DBS (Dbs.com.sg 2018). This is due to the introduction of the net banking and the Fintech companies. DBS should work on their organisational strategy and bring policies that are more flexible (Shim 2013).
Consumer expectations: As discussed earlier, consumers are the key stakeholders of an organisation and for the Development Bank of Singapore. Consumer’s satisfaction should be the main motto of any organisation with such high competitive industry. The consumer’s expectation from the organisation is increasing day by day. This is affecting DBS banking policies. Sustaining the consumer is becoming a challenge for DBS due to their increased level of expectation (Albert and Merunka 2013).
Increasing competition: DBS is facing a huge competition from the new banks and financial institution but apart from that, DBS is also facing tough competition from the Fintech companies. Fintech companies are the start-up companies that use software to provide financial services to the customer. This affecting all the major stakeholders of the company as the organisation is failing to match up with the competition from the Fintech companies (Dbs.com.sg 2018). DBS should implement e-banking in their organisation so that the problem can be minimised to a great extent. DBS should bring more policies that are profitable for both the consumers as well as for the companies.
Corporate social responsibility is a type of approach that the business organisation adopts that contributes to the sustainable development by giving social, economic and environmental benefits to all the stakeholders of the business organisation. Corporate social responsibility is an important factor that will help DBS to expand their business. Some of the problems faced by DBS in last 5 years are listed below:
Decision-making issues: Development Bank of Singapore is the largest bank in Asia in terms of Assets. They are the most experienced banking institution in Singapore. The bank was established by the Singaporean bank to handle all the financial and monetary transactions and related activities from the Economic Development Board (Newell, Pham and Ooi 2015). The bank has a strong customer base. However, in last five years, the bank has made some horrible issues regarding the policies of the organisation. The organisation has lost a lot of key employees as well as lost many customers (Dbs.com.sg 2018). Ethical-decision making should focus on preserving the customer and employee rights keeping in mind all business related operations are fair and justified.
Fundamental issues: The most essential or fundamental ethical issue that DBS has faced in last 5 years is related to integrity and trust. Development Bank of Singapore has faced many problems related to fraudulence. The company has suffered a loss of nearly $50 million in last 5 years (Dbs.com.sg 2018). It has also suffered the trust issues of the shareholders and the consumer as the consumers and the shareholders were affected badly due to fraudulence.
Governance issues: A business organisation is said to follow the environmental, federal and safety regulations and monetary rules and regulations (Rich 2014). Development Bank of Singapore has been reported many times for not following the proper rules and regulations. This has also affected the brand image of the organisation and the customers were shifted to another banking organisation.
Infocomm technology: Development Bank of Singapore is one of the very few banks that have implemented this technology. Infocomm technology helped the organization to make the ATM machines more efficient, which reduces the risk of fraud. It helped in the transaction that is more efficient also reduces the time of a transaction. It has also increased the customer satisfaction.
Board of directors: Development Bank of Singapore has changed its entire board of directors and replaced by the new board of director to make effective planning and decisions (Dbs.com.sg 2018). The organisation also organised a panel that takes time to time report of the organisational functions.
The strategy that an organisation made during the making of the business plan of the organisation is known to be intended strategy. Intended strategies are those that the company intended to execute. Emergent strategies are those that are unplanned and that arises with time due to unexpected challenges and opportunities (Serrat 2017). Emergent strategies are mainly formed due to the changes in government policies or due to any external challenge that happens in the industry. Emergent strategies mainly lead to the disastrous results. Development Bank of Singapore was formed in 1968, and that time the organisation had made some strategies that have changed and a new strategy is now applied by the organisation (Dbs.com.sg 2018). This is due to the change in consumer preference, government policies, advancement in technology, increased competition, opportunities in the market. The emergent strategy changes time to time according to the situation.
Singapore government established the Development Bank of Singapore to handle all the financial and monetary transactions. The intended strategy was to handle and operate only in the Singaporean industry but later the organization got an opportunity to expand its business outside Singapore also. DBS is now one of the most valued financial banks in Asia and it is the largest in terms of assets in Asia (Rich 2014).
DBS’s strategy was to provide financial services and they did not want to introduce digital banking into their business operation but in 2009, the current Chief Operating Officer of DBS spearhead the bank’s transformation (Dbs.com.sg 2018). They were one of the worst banking institutions in the market but they changed the scenario and recently DBS is awarded as the best digital bank in Singapore.
DBS intended strategy at the beginning of the organisation was to provide quality services to the people and to make flexible policies so that the customer can be benefited by their policies but with time, the competitive environment made the organisation to apply different strategies (Dbs.com.sg 2018). Now they are more into the growth of their organisation, they do not make flexible policies for their customers.
DBS never thought of adopting digital banking but with time, they are forced to include in its banking strategy. This will help their customer and also to the organization in reducing time consumption.
Their strategy was to provide banking services only in the Singaporean market but with time, they expanded their business in Asia. This will help them in increasing their market outside Asia also (Serrat 2017). These will increase the customer base and will also help them in increasing the goodwill of the organisation.
Digital banking will increase the risk of theft and fraud.
The increased competition in Asia and the introduction Fintech companies is highly affecting DBS (Dbs.com.sg 2018).
Conclusion
Therefore it can be concluded Development Bank of Singapore has some strength, weakness, opportunity and strength that is impacted on people having their business in the bank. The associated people like shareholder, stockholders are taking care of every single situation and that is the key process of balanced approaches. There are some strategies have been taken by DBS and that influences other opportunities in business too.
References:
Acharya, V.V., Le, H.T. and Shin, H.S., 2017. Bank capital and dividend externalities. The Review of Financial Studies, 30(3), pp.988-1018.
Albert, N. and Merunka, D., 2013. The role of brand love in consumer-brand relationships. Journal of Consumer Marketing, 30(3), pp.258-266.
Dbs.com.sg 2018 Welcome to DBS Singapore retrieved from: https://www.dbs.com.sg/index/default.page [Accessed on 21st April, 2018]
Emery, R.F., 2018. The bond markets of developing East Asia. Routledge.
Fu, X.M., Lin, Y.R. and Molyneux, P., 2014. Bank competition and financial stability in the Asia Pacific. Journal of Banking & Finance, 38, pp.64-77.
Hartwell, C.A., 2013. A Eurasian (or a Soviet) Union? Consequences of further economic integration in the Commonwealth of Independent States. Business Horizons, 56(4), pp.411-420.
Hill, H. and Menon, J., 2014. Financial safety nets in Asia: genesis, evolution, adequacy and way forward. New Global Economic Architecture: The Asian Perspective, pp.83-111.
Ho, J.K.K., 2014. Formulation of a systemic PEST analysis for strategic analysis. European academic research, 2(5), pp.6478-6492.
Moosazadeh, H., Barimani, P., Mohammad, S.D. and Eslami, A., 2016. Developing Strategies to Improve Knowledge-Based Resistive Economy Using SWOT Model. International Journal of Resistive Economics, 4(4), pp.96-108.
Newell, G., Pham, A.K. and Ooi, J., 2015. The significance and performance of Singapore REITs in a mixed-asset portfolio. Journal of Property Investment & Finance, 33(1), pp.45-65.
Rich, B., 2014. Mortgaging the Earth: World Bank, Environmental Impoverishment and the crisis of development. Routledge.
Rich, B., 2014. Mortgaging the Earth: World Bank, Environmental Impoverishment and the crisis of development. Routledge.
Serrat, O., 2017. Auditing knowledge. In Knowledge Solutions(pp. 15-20). Springer, Singapore.
Serrat, O., 2017. Social network analysis. In Knowledge solutions (pp. 39-43). Springer, Singapore.
Shim, J., 2013. Bank capital buffer and portfolio risk: The influence of business cycle and revenue diversification. Journal of Banking & Finance, 37(3), pp.761-772.
Soh, S.E., Tint, M.T., Gluckman, P.D., Godfrey, K.M., Rifkin-Graboi, A., Chan, Y.H., Stünkel, W., Holbrook, J.D., Kwek, K., Chong, Y.S. and Saw, S.M., 2013. Cohort profile: Growing Up in Singapore Towards healthy Outcomes (GUSTO) birth cohort study. International journal of epidemiology, 43(5), pp.1401-1409.
Tremewan, C., 2016. The political economy of social control in Singapore. Springer.
Vogel, H.L., 2014. Entertainment industry economics: A guide for financial analysis. Cambridge University Press.
Wu, M.W. and Shen, C.H., 2013. Corporate social responsibility in the banking industry: Motives and financial performance. Journal of Banking & Finance, 37(9), pp.3529-3547.
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
