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January 2017
Halloween in Nashville, 1974
If the rate of change on the
outside (of an organization)
exceeds the rate of change on
the inside, the end is near....
-J...
Digital is the main reason
just over half the Fortune 500 companies
have disappeared since the year 2000.
-Pierre Nanterme...
All our knowledge is about the past, but all
our strategic decisions are about the future.
What we don’t know
we don’t kno...
Thx to R. Wieselfors, Ericsson for photos
Thx to R. Wieselfors, Ericsson for photos
“We always overestimate the change
that will occur in the next two years
and underestimate the change that will
occur in t...
2015
Food deliveries
Check-in
Porters
Cleaning
Lawnmowing
Room Service
People
• “Net generation”
• 24x7 “mobile” workforce
• Knowledge via MOOCs
• Sharing not owning
• Sustainability
• Gigs and...
http://marketrealist.com/2016/01/fourth-industrial-revolution-need-know/
• Launched June 2010
• 519 cities in >68 countries
• Limited physical assets
• USD 62.5 bln valuation
(Ericsson – USD 18 b...
Evolution of transportation
http://www.slideshare.net/MarketRevolution/shsu-sharing-economy-collaborative-consumption
Sweden’s Gig Economy
Age of Independent Contractors
68% Swedes are either
making an income from
online activities or
buyin...
Trading one job for a number of “gigs”…
Hoffice – a Swedish concept gone global
Knowledge through MOOCs
(Massively Open Online Courses)
A system that activates the untapped
value of all kinds of assets through models
and marketplaces that enable greater
effi...
LEARNING
p2p learning open courses & moocs
PRODUCTION
co-design / co-innovationdigital peer production distributed fabrica...
Community platform
Hierarchicalfirm
VS
Ford
~ Created by employees within
organizational boundaries
E.g., Local Motors
~ C...
“Local Motors is the place for people to create
influential vehicles together.”
• 100xs less capital cost
• 5xs faster pro...
Local Motors to print 3D cars
in its micro-factories
Self-driving vehicle with IBM Watson
https://localmotors.com/posts/category/press-releases/
Local and mobile factories
Integrating offline and online communities
Arizona
Washington DC
Tennessee
Berlin
FIRM FOUNDED EMPLOYEES MKT CAP
BMW 1916 122,000 $56B
UBER 2009 7,000 $62B
MARRIOTT 1927 200,000 $32B
AIRBNB 2008 5,000 $21...
Pipeline – Traditional linear value chain
Supply-side economies of scale
Network Effects
Value rises as more people
use the platform
Metcalfe’s Law
Platform-based business models
Pipeline BMs vs Platform BMs
 Seller of products and/or
services
 SMACIT to make linear
process efficient
 Manager of f...
Platforms leverage Network Effects
“We want to help
small businesses
grow by solving
their problems.”
- Founder & CEO Jack Ma
Expanding industry boundaries
“...
Alibaba Group – “Doing more with less”
TRUST: The prerequisite for scale and scope
 Third parties attached
to platform
− Fraud
− Operational
− Health, safety
 ...
The threat of the “Winner-take-all” Platforms
http://www.the-digital-insurer.com/dia/zhong-an-chinas-first-complete-online...
Banking is essential,
but banks are not.
Bill Gates
LEARNING
p2p learning open courses & moocs
PRODUCTION
co-design / co-innovationdigital peer production distributed fabrica...
From the north of Sweden
Person-to-Business loans
What is Fintech?
Technologies for banking and corporate finance,
capital markets, financial data analytics, payments,
and ...
Commoditization of banking
Moving in on traditional bank territory
Inspiration from CB Insights, SEB base webpage slightly modified to make more room
Cheaper and easier international payments
Automated investing based on algorithms
Changing behaviors?
Profits from non-mortgage retail lending, e.g., credit cards,
car loans, could be reduced by 60% and revenues by 40%
over ...
Benefits vs challenges
- “Condemned to the freedom of
choice”
- “Freedom with responsibility”
- Increased spending,
overex...
Insurtech: Disrupting the insurance value chain
Activity Examples
Product Emerging needs (Sharing
Economy)
Changing behavi...
New products due to Sharing Economy
http://www.the-digital-insurer.com/dia/axas-digital-initiatives/
https://www.axa.com/en/newsroom/news/axa-connected-devices
http://wesavvy.com/
https://www.axa.com/en/newsroom/news/axa-adopts-facebook-messenger
http://www.businessinsider.com/japanese-insurance-employees-replaced-ibm-watson-2017-1?r=US&IR=T&IR=T
http://www.friendsurance.com/
http://www.nielsen.com/us/en/insights/news/2016/usage-based-insurance-is-gaining-traction-particularly-among-millennials.h...
By 2020 there will be 5Xs as many connected
devices as connected people
Many new industry data platforms are emerging
https://www.siemens.com/press/pool/de/events/2016/corporate/2016-09-industry...
http://www-01.ibm.com/common/ssi/cgi-bin/ssialias?htmlfid=GBW03245USEN
https://www.youtube.com/watch?v=4k5ja7UFSkc
co
al-
Exploitation
Improving existing
value creation
activities
Exploration
Developing new
value creation
activities
Adapted fro...
Future consequences of
EU Payment Services Directive (PSD)?
 Payment Services Directive 2 (PSD2) passed on January 12, 20...
https://techcrunch.com/2016/05/23/can-startups-disrupt-the-20-billion-cyber-insurance-market/
http://marketrealist.com/2016/01/fourth-industrial-revolution-need-know/
The speed of current breakthroughs has no historical
precedent. When compared with previous industrial
revolutions, the Fo...
Quantum
computing
Brain-
computer
interface
Smart
robots
Blockchain Machine
learning/AI
Autonomous
vehicles
Augmented
real...
Exploitation
Improving existing
value creation
activities
Exploration
Developing new
value creation
activities
Adapted fro...
Enablers of a “true” Collaborative Economy?
Blockchains and
smart contracts
Cryptocurrencies
Sharing/
Collaborative
Econom...
http://www.investstockholm.com/news/startups-lining-up-for-space-in-stockholms-first-fintech-hub/
More than 180
members
al...
Robin Teigland
robin.teigland@hhs.se
www.slideshare.net/eteigland
@robin.teigland
If you love knowledge,
set it free…
If y...
http://www.slideshare.net/eteigland
New Industrial Revolution for Banking and Insurance
New Industrial Revolution for Banking and Insurance
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New Industrial Revolution for Banking and Insurance

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My presentation on digitalization of the banking and insurance industry for a group of Chairmen within the industry in Sweden on January 31, 2017.

Published in: Business
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New Industrial Revolution for Banking and Insurance

  1. 1. January 2017
  2. 2. Halloween in Nashville, 1974
  3. 3. If the rate of change on the outside (of an organization) exceeds the rate of change on the inside, the end is near.... -Jack Welch
  4. 4. Digital is the main reason just over half the Fortune 500 companies have disappeared since the year 2000. -Pierre Nanterme, CEO Accenture, 2016 Yet..Digital disruption has only just begun.
  5. 5. All our knowledge is about the past, but all our strategic decisions are about the future. What we don’t know we don’t know Most of what we need to know to make good decisions today is outside our comprehension: We don’t even know it’s there. What we know What we know we don’t know
  6. 6. Thx to R. Wieselfors, Ericsson for photos
  7. 7. Thx to R. Wieselfors, Ericsson for photos
  8. 8. “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.” - Bill Gates, The Road Ahead, 1996
  9. 9. 2015
  10. 10. Food deliveries Check-in Porters Cleaning Lawnmowing Room Service
  11. 11. People • “Net generation” • 24x7 “mobile” workforce • Knowledge via MOOCs • Sharing not owning • Sustainability • Gigs and not jobs Technology • Broadband • Smart phones • Cloud • Internet of Things • Big Data • 3D printing • Robotics/AI • VR/AR • Holography Open Source IP • Software • Hardware • Physibles Convergence of….. Finance • Microlending/microfinance • Crowdfunding/equity/P2P • Cryptocurrencies • Blockchain • Mobile money/payments • M2M payments
  12. 12. http://marketrealist.com/2016/01/fourth-industrial-revolution-need-know/
  13. 13. • Launched June 2010 • 519 cities in >68 countries • Limited physical assets • USD 62.5 bln valuation (Ericsson – USD 18 bln; Ford – USD 47 bln; GM USD 50 bln) “Doing more with less” through a global platform
  14. 14. Evolution of transportation http://www.slideshare.net/MarketRevolution/shsu-sharing-economy-collaborative-consumption
  15. 15. Sweden’s Gig Economy Age of Independent Contractors 68% Swedes are either making an income from online activities or buying labor from others 12% work for ‘sharing economy’ platforms, e.g., Upwork, Uber or Skjutsgruppen Types of Work in Sharing Economy http://www.uni-europa.org/wp-content/uploads/2016/03/crowd-working-survey-swedenpdf.pdf
  16. 16. Trading one job for a number of “gigs”…
  17. 17. Hoffice – a Swedish concept gone global
  18. 18. Knowledge through MOOCs (Massively Open Online Courses)
  19. 19. A system that activates the untapped value of all kinds of assets through models and marketplaces that enable greater efficiency and access. - Botsman The Sharing Economy Harvard Business Review, 2014 The Sharing Economy: Embracing Change with Caution http://www.slideshare.net/eteigland/sharing-economy-webb
  20. 20. LEARNING p2p learning open courses & moocs PRODUCTION co-design / co-innovationdigital peer production distributed fabrication (makers) FINANCE p2p funding p2p payments p2p insurance compl. currencies GOVERNANCE SWARM participatory organizations participatory government blockchain / DAO CONSUMPTION redistribution local food systemsproduct-service on-demand services COLLABORATIVE ECONOMY FRAMEWORK V0.1
  21. 21. Community platform Hierarchicalfirm VS Ford ~ Created by employees within organizational boundaries E.g., Local Motors ~ Created by community collaborators regardless of affiliation Teigland, Di Gangi, & Yetis 2012 The Flipped Firm: New model of value creation?
  22. 22. “Local Motors is the place for people to create influential vehicles together.” • 100xs less capital cost • 5xs faster production
  23. 23. Local Motors to print 3D cars in its micro-factories
  24. 24. Self-driving vehicle with IBM Watson https://localmotors.com/posts/category/press-releases/
  25. 25. Local and mobile factories Integrating offline and online communities Arizona Washington DC Tennessee Berlin
  26. 26. FIRM FOUNDED EMPLOYEES MKT CAP BMW 1916 122,000 $56B UBER 2009 7,000 $62B MARRIOTT 1927 200,000 $32B AIRBNB 2008 5,000 $21B WALT DISNEY 1923 185,000 $172B FACEBOOK 2004 15,000 $369B WALMART 1962 2,300,000 $206B ALIBABA 1999 36,000 $241B Adapted from Parker & Van Alstyne, with Choudary, 2016, and updated January 2017 Something fundamental is changing
  27. 27. Pipeline – Traditional linear value chain Supply-side economies of scale
  28. 28. Network Effects Value rises as more people use the platform Metcalfe’s Law Platform-based business models
  29. 29. Pipeline BMs vs Platform BMs  Seller of products and/or services  SMACIT to make linear process efficient  Manager of firm with distinct boundaries  First mover advantage  Ownership of resources  Supply-side economies of scale  Destination for solving customer needs  SMACIT to co-create value  Leader of ecosystem with fuzzy boundaries  First to scale advantage  Access to resources  Demand-side economies of scale (network effects) PLATFORM CONSUMERSPRODUCERS Elements of value exchange Adapted from Parker & Van Alstyne 2016
  30. 30. Platforms leverage Network Effects
  31. 31. “We want to help small businesses grow by solving their problems.” - Founder & CEO Jack Ma Expanding industry boundaries “to build the future infrastructure of commerce”
  32. 32. Alibaba Group – “Doing more with less”
  33. 33. TRUST: The prerequisite for scale and scope  Third parties attached to platform − Fraud − Operational − Health, safety  Payment systems − Functionality − Fraud  Privacy of data − Cybersecurity − Ethical usage of personal data Trust in Digital Environments
  34. 34. The threat of the “Winner-take-all” Platforms http://www.the-digital-insurer.com/dia/zhong-an-chinas-first-complete-online-insurance-company/ https://www.ft.com/content/e76198d2-1b26-11e5-8201-cbdb03d71480 Moving into banking and insurance
  35. 35. Banking is essential, but banks are not. Bill Gates
  36. 36. LEARNING p2p learning open courses & moocs PRODUCTION co-design / co-innovationdigital peer production distributed fabrication (makers) FINANCE p2p funding p2p payments p2p insurance compl. currencies GOVERNANCE SWARM participatory organizations participatory government blockchain / DAO CONSUMPTION redistribution local food systemsproduct-service on-demand services COLLABORATIVE ECONOMY FRAMEWORK V0.1
  37. 37. From the north of Sweden
  38. 38. Person-to-Business loans
  39. 39. What is Fintech? Technologies for banking and corporate finance, capital markets, financial data analytics, payments, and personal financial management - Accenture/CB Insights Finance Technology Fintech
  40. 40. Commoditization of banking
  41. 41. Moving in on traditional bank territory Inspiration from CB Insights, SEB base webpage slightly modified to make more room
  42. 42. Cheaper and easier international payments
  43. 43. Automated investing based on algorithms
  44. 44. Changing behaviors?
  45. 45. Profits from non-mortgage retail lending, e.g., credit cards, car loans, could be reduced by 60% and revenues by 40% over next decade.
  46. 46. Benefits vs challenges - “Condemned to the freedom of choice” - “Freedom with responsibility” - Increased spending, overextending private economy - Loss of privacy and integrity of data - Risk of fraud - Cybersecurity - Difficulty in being a good citizen? - E.g., Income tax filing + Increased choice + Improved ease of transactions + 24/7/365 access + Reduced financial fees + Alternative investment possibilities + Lowered switching costs
  47. 47. Insurtech: Disrupting the insurance value chain Activity Examples Product Emerging needs (Sharing Economy) Changing behaviors AXA & BlaBla Car AXA Drive Coach AXA Health Keeper WeSavvy Service & Claims AI Drones Real time Fukoku Fluttrbox Rightindem Business model Peer-to-peer (P2P) Lemonade Guevara Friendsurance Pricing Usage-based (UBI) Metromile Smartride
  48. 48. New products due to Sharing Economy http://www.the-digital-insurer.com/dia/axas-digital-initiatives/
  49. 49. https://www.axa.com/en/newsroom/news/axa-connected-devices
  50. 50. http://wesavvy.com/
  51. 51. https://www.axa.com/en/newsroom/news/axa-adopts-facebook-messenger
  52. 52. http://www.businessinsider.com/japanese-insurance-employees-replaced-ibm-watson-2017-1?r=US&IR=T&IR=T
  53. 53. http://www.friendsurance.com/
  54. 54. http://www.nielsen.com/us/en/insights/news/2016/usage-based-insurance-is-gaining-traction-particularly-among-millennials.html
  55. 55. By 2020 there will be 5Xs as many connected devices as connected people
  56. 56. Many new industry data platforms are emerging https://www.siemens.com/press/pool/de/events/2016/corporate/2016-09-industry-analyst-conference/presentation-kayser.pdf
  57. 57. http://www-01.ibm.com/common/ssi/cgi-bin/ssialias?htmlfid=GBW03245USEN
  58. 58. https://www.youtube.com/watch?v=4k5ja7UFSkc
  59. 59. co al-
  60. 60. Exploitation Improving existing value creation activities Exploration Developing new value creation activities Adapted from March 1991
  61. 61. Future consequences of EU Payment Services Directive (PSD)?  Payment Services Directive 2 (PSD2) passed on January 12, 2016  Must be included in domestic legislation by January 13, 2018  Among other things, requires that banks open up, through APIs  Intention is to improve consumer experience  Some precedent (e.g., Tink), but no longer discretionary  What does this mean for FinTech and banks?
  62. 62. https://techcrunch.com/2016/05/23/can-startups-disrupt-the-20-billion-cyber-insurance-market/
  63. 63. http://marketrealist.com/2016/01/fourth-industrial-revolution-need-know/
  64. 64. The speed of current breakthroughs has no historical precedent. When compared with previous industrial revolutions, the Fourth is evolving at an exponential rather than a linear pace. Moreover, it is disrupting almost every industry in every country. And the breadth and depth of these changes herald the transformation of entire systems of production, management, and governance. WEF schwab The Fourth Industrial Revolution https://www.weforum.org/agenda/2016/01/the-fourth-industrial-revolution-what-it-means-and-how-to-respond/
  65. 65. Quantum computing Brain- computer interface Smart robots Blockchain Machine learning/AI Autonomous vehicles Augmented reality http://www.gartner.com/newsroom/id/3412017
  66. 66. Exploitation Improving existing value creation activities Exploration Developing new value creation activities Adapted from March 1991
  67. 67. Enablers of a “true” Collaborative Economy? Blockchains and smart contracts Cryptocurrencies Sharing/ Collaborative Economy IoT/sensors P2P/M2M micropayments Big data
  68. 68. http://www.investstockholm.com/news/startups-lining-up-for-space-in-stockholms-first-fintech-hub/ More than 180 members already
  69. 69. Robin Teigland robin.teigland@hhs.se www.slideshare.net/eteigland @robin.teigland If you love knowledge, set it free… If you like this presentation and would like to contribute to our research, we accept bitcoins: 14hs4JbnQLXE87GGzu84uXGaspmxmnLpwC. Thank you!!!!!
  70. 70. http://www.slideshare.net/eteigland

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