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@Jameshaycock AdaptiveLab.com
BYE BYE
BANKS?
How retail banks are being
displaced, diminished and
dis-intermediated by tech
startups and what they can
do to survive

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2 Title | Subtitle
What we’re going to cover
Intro
A three stage scenario already
underway
Why change within established
companies is hard
What traditional banks can do
Setting the scene
Displaced, diminished,
dis-intermediated
People, Culture,
Technology
Launching a Beta Bank

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55 450m $100bn

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“software is eating the world”
Marc Andreessen

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Could banking be next?

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“Banking is necessary.
Banks are not.”

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“We can reinvent the
entire thing”

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“They all want to eat
our lunch”

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Displaced, diminished, dis-intermediated
A three stage scenario that is underway
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Displaced

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Diminished

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Dis-intermediated

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Displaced, diminished,
dis-intermediated in Telco
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Displaced

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Diminished

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Dis-intermediated

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Could banking be next?

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Displaced, diminished,
dis-intermediated in Banking

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Displaced

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Title Text

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core banking
activities
3rd party app
ecosystem
PSD2
The need to visit
bank properties is
lowered

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Diminished

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| Bye Bye Banks?
Bank
A
Card 2
Card 1
£ Credit
card Co.
Card 3 Bank
B

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Dis-intermediated

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Bank
A
Bank
B
Intermediary

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“The impact of the distributed ledger could be much wider
than payments…
…it may be possible in the future for the existing
infrastructure of the financial system to be gradually
replaced by a variety of distributed systems”
Bank of England, 2014

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People, culture and technology
(why change is hard)
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69% banking executives didn’t believe retail banks are able
to react quickly enough to changing consumer needs.
Adaptive Lab / Research Now
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79% of banking executives felt their leadership weren’t
knowledge about digital.
Adaptive Lab / Research Now
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“Depending which bank you talk to, they will tell you that
anywhere between 50% and 90% of their IT budget is being
driven by regulatory changes. It makes change very
difficult.”
Anonymous Banking Executive
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“If you’re a group MD responsible for a P&L it’s
understandable you are not going to innovate or disrupt in a
way that damages it.”
Lee Sankey, former Group Design Director, Barclays
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How the incumbents can respond:
Launch a Beta Bank
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Rethink
A Beta Bank is a fresh start, redesigning a bank
from the ground up.
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Separate
A Beta Bank is distinct from the parent bank
with a different HQ and independent leadership.

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Experiment
A Beta Bank is an experiment in new products,
services and ways of working.
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Digitise
A Beta Bank is a digital business from the ground
up.

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Design
A Beta Bank prioritises investment in customer
experience and uses design to solve problems.
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Focus
A Beta Bank isn’t everything to everyone. It
offers a few, differentiated products for a well-
defined customer.

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Open
A Beta Bank is transparent and open. Its
business model is clear and its pricing simple.
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The Beta Bank
Operating Model
1. Purpose
2. Customer
3. Leadership
5.Cultur
e 4
.People
7. Team
Structure
6.Prin
ciples
10. Long Term View
8. Working
Practices
9.Techn
ology

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Appoint native leaders

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Organise in small,
multi-disciplined
teams

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Design around modern
working practices

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“If the rate of change on the outside is
faster than on the inside, the end is near.”
Jack Welch

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1. Banks are being displaced, diminished and
dis-intermediated
2. Legacy technology, culture and people
make it hard to change from within
3. To create an organisation that can compete
with companies run by the likes of Mark
Zuckerberg Banks need to launch a Beta
Bank
Wrap up

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Are you ready to launch
your Beta Bank?