bank digital transformation(s)
TRANSCRIPT
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Bank Digital transforma0on(s)?
Cass Business School, 9 April 2015
Gianvito Lanzolla, PhD Professor of Strategic Leadership, Cass Business School, London, UK
…digital technologies driving business transforma0ons
• Internet • Apps • Analy.cs • Cloud • E-‐commerce • Mobile • Internet of Things • …
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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
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• Innova.on: the impact of inter ‘industry’ connec.vity
• Value proposi.ons transforma.ons: products becoming more informa.on based
Digital transforma0ons: two trends
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…new lenses are required
• Disrup.ons • Network effect & the long tail • Convergence • (Near)Zero marginal cost compe..on
The underlining transforma0onal forces
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It is not always like this…
Performance
Time
Old Technology
New Technology
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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
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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
Sustaini
ng Inno
va.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
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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
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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
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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
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• 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…
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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