IDC: The Role of Digital Transformation in Industry Disruption
This document discusses digital transformation in industry disruption. It defines digital transformation as the application of digital technology across all aspects of society. Digital transformation in banking refers specifically to using new digital technologies like mobile, analytics and embedded devices to improve customer experience, streamline operations and create new business models. The document notes that digital transformation promises disruption but also opportunities to reduce complexity, costs and increase access and utility for customers beyond traditional banking services. It states that most bank IT budgets go to compliance, risk and operations rather than innovation, but banks are increasingly investing in initiatives to enable innovation and new projects through approaches like innovation labs and partnerships.
IDC: The Role of Digital Transformation in Industry Disruption
- 1. The Role of Digital Transformation in Industry Disruption James Wester – Research Director Jerry Silva – Research Director FSI Transformation Assembly 2015
- 2. 2 “the changes associated with the application of digital technology in all aspects of human society.” Wikipedia Digital Transforma/on In a narrower sense, "digital transformation" may refer to the concept of "going paperless.“ Wikipedia “The use of new digital technologies (social media, mobile, analytics, or embedded devices) to enable major business improvements (such as enhancing customer experience, streamlining operations, or creating new business models). Sloane Business School, MIT
- 3. 3 The ability to: deliver content products, services, advice, information to consumers Retail, SME, Corporate, Staff regardless of origin or destination Core, CRM, Lending
- 4. 4 "Silicon Valley is coming… they all want to eat our lunch” Jamie Dimon, CEO JP Morgan Chase
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- 7. The reports of my death… 7 The promise of “disruption” has led to immense attention.
- 8. Payments: Transformation Target © IDC Visit us at IDC.com and follow us on Twitter: @IDC 8
- 9. Find the Opportunities © IDC Visit us at IDC.com and follow us on Twitter: @IDC 9 Cardholder Merchant Card Issuer Merchant Acquirer Card Networks Rules Communications AcctManagement Settlement(lessfees) Payment Service/Product Payment PurchaseDetails Settlement (less fees) Purchase Details
- 10. Worldwide Payment Cards 10 Source: Nilson Report, Federal Reserve 5.99 4.21 2.64 1.29 0.71 0.71 0.11 0.08 0.07 0 1 2 3 4 5 6 7 Private Label UnionPay Visa MasterCard Maestro Domestic Amex JCB Other (Billions) Cards in Circulation § 16 billion cards worldwide (credit, debit, prepaid) § 775 million cards in U.S. alone
- 11. US Payment Methods 11 Source: Nilson Report $1,556 $1,053 $2,491 $2,111 $1,348 - 500 1,000 1,500 2,000 2,500 3,000 Cash Checks Credit Cards Debit Cards Electronic Payments (Billions) Payment Value By Type – 2013
- 12. Transformational Opportunities 12 Reduce Complexity: Simplify complex processes Reduce Cost: Remove high, often arbitrary, fees Increase Access: Expand to untapped markets Increase Utility: Move beyond money
- 13. 13 80% - 85% of the CIO/ COO agenda today goes to regulatory compliance, risk management, security, and operations. Ultimately this is an untenable position Shadow IT has become the de facto way for line of business to create new products and services, bypassing the IT group altogether.
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- 15. 15 $14.8B will be spent in 2015 on transformational initiatives in US Banking Many banks are investing in organizational changes to enable innovation and “go forward” projects Innovation Labs Embedded IT 3rd Party Partnerships
- 16. Questions and Answers 16 § Have you joined our IDC Community? – open to everyone! http://idc-community.com/financial § Sign up for our free monthly email newsletters: www.idc.com/gotinsights James Wester – Research Director [email protected] Twitter handle: jameswester Jerry Silva – Research Director [email protected] Twitter handle: JerrySilva_PGS