Bank digital transformation(s)
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The document discusses the impact of digital technologies on business transformations, emphasizing key drivers such as the Internet, mobile applications, and analytics. It highlights the challenges faced by incumbents due to disruptive innovations and changing consumer demands, along with the importance of understanding market dynamics and competition. The paper also examines the evolving landscape of financial services amid technological advancements.
Bank digital transformation(s)
- 1. 1 Bank Digital transforma0on(s)? Cass Business School, 9 April 2015 Gianvito Lanzolla, PhD Professor of Strategic Leadership, Cass Business School, London, UK [email protected] …digital technologies driving business transforma0ons • Internet • Apps • Analy.cs • Cloud • E-‐commerce • Mobile • Internet of Things • …
- 2. 2 The SMAC Stack Social Mobile Analytics Cloud …by 2030 35 ZB OF DATA Source: Intel, 2015 Revenue Growth Cost Savings New Value X = 80% of the World* Popula.on 50B devices* Trillions of sensors Source: Intel, 2015 Source: The Economist, 2015 Source: Consensus
- 3. 3 • Innova.on: the impact of inter ‘industry’ connec.vity • Value proposi.ons transforma.ons: products becoming more informa.on based Digital transforma0ons: two trends
- 4. 4 …new lenses are required • Disrup.ons • Network effect & the long tail • Convergence • (Near)Zero marginal cost compe..on The underlining transforma0onal forces
- 5. 5 It is not always like this… Performance Time Old Technology New Technology
- 6. 6 Disrup0on of a mature market Performance Effort (0me) Old Technology New “Invading” digital Technology Reac0on Acknowledges threat e.g. retail banks e.g. digital banks? Moore’s Law
- 7. 7 Disrup0ve Change Cri0cal elements to consider: 1. The rate of improvement that current customers can u.lize or absorb 2. The natural tendency for incumbent firms to overshoot what exis.ng customers are able to u.lize in the future 3. New technologies that ini.ally have a lower level of performance vis a vis the old one and that address they key customer needs Performance Time Sustaining Innova.ons Disrup0ve Innova0ons Performance that Customers Can U.lize or Absorb Range of performance customers can u.lize Source: Christensen, 1997 Exis.ng trade-‐offs (Compe..ve strategy) Blue Ocean Low end Value Cost
- 8. 8 Demand side – Increasing customer u0lity Value to consumer Actual (or an.cipated) size customer base Value of standards Driven product Conven.onal product Demand side – Increasing availability of complementary goods Complementary goods Installed base Complementary goods Installed base
- 9. 9 Winners take all and the “long tail”? One product becomes the preferred choice for nearly everyone What are the mechanism driving value in the long tail? Better matching. Growth is intrinsically constrained in the long tail Picture from the Economist
- 10. 10 Media Capability Space e.g. Disney, Facebook, Analogue device manufacturer e.g. Sony Traditional content distributors e..g. Blockbuster, Borders Technology Capability Space Providers of access to digital content e.g. Google, Apple, YouTube, Amazon Digital device manufacturers e.g. Apple, Sony, Nokia Telecomm. (digital) network operators e.g. Vodafone, Sky, BT Digital Technology Developers Capability Space e.g. Ericsson, Microsoft, Nokia, Siemens, IBM Financial services – e.g. payments, loans Advertising digital platforms – e.g. pay-per-click Intellectual property protection – e.g. digital rights management Digital application (software) development tools – e.g. Android, NET Financial Service Capability Space Source: Lanzolla & Anderson, 2010
- 11. 11 • Innova.on & disrup.ons • Network effect & the long tail • Convergence • (Near)Zero marginal cost compe..on The underlining transforma0onal forces First Mover or Follower? No magic…
- 12. 12 Source: Suarez and Lanzolla, 2005 In Rough Waters First Mover Advantages are difficult to maintain Bank Digital transforma0on(s)? Cass Business School, 9 April 2015 Gianvito Lanzolla, PhD Professor of Strategic Leadership, Cass Business School, London, UK [email protected]