Focusing On The Customer
The customer is central to our strategic focus. To meet their evolving and diverse requirements, the Bank is making a number of judicious, long-term investments to enhance its platforms and IT infrastructure and to develop the expertise of its human resource pool. These are designed to generate additional value for customers, capitalise on growth opportunities and realise greater wallet share in specific customer and market segments for the Bank.

The adverse economic climate of 2001 had the beneficial effect of focusing our energies on the direction and effectiveness of our investment strategies. Investments have had to continue to fuel the expansion and growth of the Banks regional franchise. People, technology and processes have been identified as the key platforms that will enable us to deepen our relationship with our customers and realise our stated goal of becoming the Best Bank in Asia.

Being customer-intimate requires us to understand our customers thoroughly - their background and aspirations - to be able to identify their individual needs. We have designed a services?architecture along the value chain between customers and the suppliers of products to help us better recognise and understand the specific services required by the customer. This will help us create a brand differentiation.

The Re-engineering of Operating Processes and Technology
DBS is developing a standard operating or franchise model called Asia 21 for core activities within the Group. Our models single purpose is to restructure the Bank into a customer-intimate organisation with clear strategic advantages in the areas of customer information, distribution capabilities and product and service choices.

By providing a common platform across the region, Asia 21 will enable the Bank to be more agile in responding to customers?aspirations and deliver greater value to our customers. It will further enhance the Banks flexibility in the implementation of new ideas and services and ultimately generate shareholder value.

Investments in infrastructure typically centre on technology and processes. However, they remain incomplete if corresponding measures are not applied in the area of corporate governance and in the development of human resources. DBS continues to invest strategically in these areas for we believe these investments will help us become a more efficient and mobile organisation that can compete with global competitors in the region - on their terms.
 

The Information Technology Group (ITG)
A Year of Change and Growth
As changes in management and organisation took effect, new systems were integrated and deployed, new architectures defined and new processes introduced.

ITG underwent restructuring in June 2001 to achieve three objectives:

New, Improved Systems
One of the central achievements in 2001 was the development and deployment of My Customer?- a pivotal customer relationship management system based on Siebel technology - to more than 1,800 internal customers. My Customer?delivers a common enterprise-wide framework for customer management, complementing DBS?initiatives to place the customer at the centre of its daily business life.

The deployment of an integrated branch banking platform - BBS 2000 - was successfully concluded in 105 DBS branches in June 2001.

Continuing Initiatives
An upgrading project to improve the availability, robustness and performance of the Internet Banking platform - a market leader - was concluded in November.

Seamless Rationalisation
The successful harmonising of structures, networks, processes and procedures post the acquisition of Dao Heng Bank in April illuminates the behind-the-scenes?technical capabilities delivered in 2001.

Continued Focus on Data and Network Security
A less visible but critical highlight of the ongoing transformation of our IT platform is the focus on providing a reliable and secure environment. The relevance of these efforts were tragically underscored by the events of September 11.

ITG is poised to take advantage of the infrastructural groundwork laid in 2001 and is committed to providing the Bank and its customers with world-class solutions in a secure, robust and safe environment.

ASIA 21: A NEW REGIONAL OPERATING PLATFORM
In 2001, DBS made substantial progress in its goal of building the Best Bank in Asia. It focused its organisation around the customer, it made a significant step towards a regional scale and it began the design of the programme that will transform DBS into a pan-Asian franchise.   Asia 21 is the transformation programme for operationalising the DBS strategy. Its objective is to develop a standard operating platform for the pan-Asian franchise in successive releases of change. Each release will introduce a coherent set of changes to the DBS operating model, combining process, technology, people, performance and risk components. Each release will improve DBS?performance in one or more dimensions of agility, capability and value.   These releases will be business-led and piloted either in Hong Kong or Singapore. Each release will use a consistent set of methods, standards, tools, infrastructure and competencies to ensure that it builds another piece of the overall franchise-wide operational model. This approach will also enable a high degree of reuse of Asia 21 components across businesses and geographies and make maximum use of new investment.   The success of the programme will be measured by DBS?ability to differentiate itself, deliver superior performance and compete successfully with international banks, new entrants and established local banks in an increasingly sophisticated Asian financial services market.

Processing & Servicing (P&S)
P&S was set up in 1999 to consolidate all platforms and the processing and servicing capabilities of the DBS Group. The ongoing efforts to transform the Banks backroom operations?into a centre of excellence delivered significant results in 2001, with greater efficiency and economies of scale achieved in the areas of quality, costs, operational risk, people and regional integration.

Pre-determined Quality Standards
The Service Management Programme was one of the quality initiatives launched in 2001 which made it mandatory for all services (internal and external) to deliver Service Level Agreement (SLA) quality standards. The SLAs guarantee that these predetermined standards are met at the time of delivery. Currently, over 40 SLAs monitor service levels through exacting metrics and measurement systems. Service reconciliation processes reports evaluate the performance of actual and committed service levels on a weekly and monthly basis.

Accuracy Levels of 99.91%
The Six Sigma Quality model was introduced to address accountability for process performance at all levels through the application of uncompromising measurements and unambiguous rules and standards. By the end of the year, P&S processes were operating at 4.6 Sigma or accuracy levels of 99.91%. An Internet-based programme was implemented with remarkable success, training more than 900 staff within P&S in Six Sigma methodology.

International Certification
Three departments - Clearing Operations, Remittance Operations and Account Services - were awarded ISO-9000 certification for process quality.

Substantial Improvements in Productivity
The implementation of two key operational systems resulted in a dramatic increase in productivity, including straight-through-processing and service delivery. The CRM System was developed for the Call Centre and the IMEX platform for Trade Operations in Hong Kong. Both won accolades from the industry. US-based Global Trade Publication elected Trade Operations the Best Trade Bank in Singapore?and the Best Trade Bank in Asia? while the call centre at Chai Chee won the New Call Centre of the Year?Award from the Call Centre Council of Singapore.

Improved Cost Competitiveness
Tactical initiatives in this area achieved significant savings through a number of re-engineering projects. P&S was able to reduce operating costs from 12.9% in 2000 to 9.7% in 2001 (as a proportion of the total banks cost) through the continued centralisation of processing functions and their optimisation through re-engineering. This resulted in a number of operations such as Custody & Trust Services, DBS Factors and DBS Finance being integrated with P&S. Consequently, operating costs reflected in unit costs improved significantly.

Managing Risk
The Operations Risk Function was implemented in 2001, achieving significant improvements in the operational risk profiles and control environment of the division. Business Continuity Plans are in place for almost all operating units and P&S is on track to achieving the required compliances for Basle II.

Developing Human Assets
A service industry demands focused, coherent investment in human capital and this is a primary objective at DBS, where the training programmes are designed to foster self development. Coupled with initiatives to enhance the quality of the work environment - the most recent being the consolidation of the operations division in Chai Chee into a new 999-seat facility - P&S has been able to optimise the synergies of various departments in a disciplined and efficient manner.

Integrating Operations
Phase one of the DBS Kwong On Bank and DBS Thai Danu Bank integration is complete. P&S operations in these entities have been established and aligned with DBS. The implementation of the systems platforms is close to completion and Metrics, Reporting and Processes have been harmonised across the region.

Regional Processing Centres
P&S has commenced phase two of the integration process with the setting up of regional processing centres. The blueprints for the Remittances Regional Centre of Excellence are complete. The roll-out of the regional processing platform for Trade, IMEX, is underway. Significant efforts have gone into ensuring the smooth integration of Dao Heng operations and the creation of a consolidated P&S function in Hong Kong. This work will accelerate in 2002 with the creation of regional structures that will further centralise processes across the franchise into Regional Centres of Excellence?

P&S has commenced phase two of the integration process with the setting up of regional processing centres. The blueprints for the Remittances Regional Centre of Excellence are complete. The roll-out of the regional processing platform for Trade, IMEX, is underway. Significant efforts have gone into ensuring the smooth integration of Dao Heng operations and the creation of a consolidated P&S function in Hong Kong. This work will accelerate in 2002 with the creation of regional structures that will further centralise processes across the franchise into Regional Centres of Excellence?Our goal is to achieve world-class stature in processing and servicing by delivering high value, high quality services to our customers, and creating, at the same time, a dynamic work environment for our people. The strong foundations we laid in 2001 will continue to deliver superior quality, cost-efficiencies and effective risk management in 2002.
 

Human Resources
Engaging Peoples Imagination, Expertise and Motivation
2001 witnessed a concerted effort by Human Resources (HR) to streamline its functions, adopt best practices, harness technology and integrate processes to better manage the Banks human capital and further align its direction with that of the Banks businesses.

Following a review in May, the HR Planning & Development operations were integrated into HR and Training in a move to streamline their structures. This was taken a step further later in the year when HR and Training was incorporated with Group Human Resource.

To lead and manage the Banks transformation into a global player, DBS?investments in enriching its talent pool has resulted in selective recruitment of high-level talent with international experience. In 2001, 28 professionals from different parts of the world joined the Bank at the level of Managing Director.

Various initiatives have been implemented to align manpower requirements with business goals, contain costs, integrate recruitment processes and develop incentive schemes and competency-based interviews to motivate and attract high-calibre staff. DBS?HR Business Relationship Teams operate in concert with the Banks Business Service Units to provide client-focused services and contribute to the success of these initiatives.

With the introduction of maternity leave for the third child and paternity leave, DBS staff enjoy two new schemes that emphasise the Banks pro-family focus. Three separate medical schemes have been incorporated into one in an effort to encourage staff to take greater interest and responsibility for their health. Each staff member can claim the equivalent of 100% government hospital rates in inpatient, and up to S$500 in outpatient medical benefits per year. Unused outpatient benefits are transferred to staff. A new intranet-based online leave application system for all leave categories was launched in August 2001 to speed up approval processes.

On the regional front, HR realised important synergies in the areas of the harmonisation and development of policies, terms and conditions of service, staff benefits and processes from the Banks acquisition of Dao Heng Bank and Vickers Ballas, as well as its new business ventures such as DBS TD Waterhouse. The HR computing environments in Singapore and the regional offices were enhanced by the roll-out of the HR Management System - a part of the DBS pan-Asian HR platform for effective manpower administration and planning.

Training through e-learning has become part of DBS?learning culture and accounted for 16% of total training days in 2001. Employees are motivated through the easy access to core financial and soft skills programmes, as well as opportunities to obtain certification of skills for some of these programmes. The benefits of technology were also extended to the Staff Orientation Programme which is now conducted online for new recruits. To maintain human interaction for more effective learning, blended learning was introduced, combining classroom training with the convenience and power of e-learning.
 

Corporate Citizenship
A Caring and Responsible Partner
In order to make a significant and positive impact, improve quality of life and promote information literacy to as many people as possible in the communities touched by the Banks operations, DBS has adopted a community investing philosophy of enabling? to assist our customers, staff and the wider community attain their goals. We seek to accomplish this through strategic investments in the arts, education and corporate volunteerism.

In the first quarter of 2001, the Riding for the Disabled Association (RDA) successfully completed construction of the DBS Riding Arena - an outdoor riding arena which enables volunteers and helpers conduct horse-riding lessons for the disabled at all times of the day.

With funding support from DBS, the Autistic Association (Singapore) (AA(S)) set up a Vocational Training Centre to assist autistic youth acquire certain life skills to help them become independent individuals in the working world.

DBS raised S$56,000 for the Straits Times School Pocket Money Fund in November 2001, in support of 6,400 school children who had limited or no access to pocket money, textbooks, stationery, food and drink.

The DBS Volunteers Programme, introduced in July 2000, grants every DBS employee in Singapore two days of volunteer leave to perform community service. Corporate volunteer days were organised monthly throughout 2001 to enable staff to help out at voluntary welfare organisations such as the RDA, the AA(S), the Geylang East Home for the Aged and the Asian Women Welfare Association Special School. Activities included taking children from the Cannossian Childrens Home on an educational tour to the Science Centre and the Apple Computer plant and teaching Microsoft Office computer programmes to the disabled at the Society of the Physically Disabled. 2001 was the International Year of Volunteers and DBS demonstrated its active support for this global effort by participating in The Wonderful World of Volunteers?- a fair held over a weekend in June 2001.

In the Arts, DBS achieved a first by having a performance venue named after the Bank. The DBS Arts Centre at Merbau Road, Robertson Quay, is the proud home of the Singapore Repertory Theatre (SRT). DBS was also conferred Patron of the Arts 2001 by the National Arts Council. DBS brought critically-acclaimed international productions to Singapore with DBS Theatre Fantasy - its own arts festival comprising Buddy? Slavas Snowshow?and Carmen? DBS continued its active support of the Arts with Kit Chans concert at the Singapore Indoor Stadium in June, the Singapore premiere of the musical Miss Saigon?in August and Jacintha Abisheganadens jazz concert. DBS Thai Danu sponsored the Thailand leg of Chang & Engs?Asian tour.

In the field of education, DBS supported the National Library Boards construction of a new National Library at Victoria Street through sponsorship of artworks painted by students from the Temasek Polytechnic on hoarding fences surrounding the new National Library site.