Bank 2.0, The emergence of a new era

Radical Ideas | Practical Implementation
Emergence of Bank 2.0
a brief view on a new world
Dr. Jay van Zyl
www.BuiltToThrive.com
www.SystemicLogic.com

Towards a New Landscape
Towards a New Landscape

BANK 1.0

Signs of Change?
Signs of Change?
Emergence of habitual based banking
Emergence of habitual based banking
More interactions, more often
More interactions, more often

The “service” era...
The “service” era...
human or machine?
human or machine?
What I say
What I say
What I do
What I do
Surprise me...
Surprise me...
What I say
What I say
What I do
What I do
Surprise me...
Surprise me...
Out of only 16%
Out of only 16%
that switched...
that switched...

Translate innovation into action...
Translate innovation into action...
Reputation for innovation creates visibility
Reputation for innovation creates visibility
Capture value though enlightenment
Capture value though enlightenment

The potential to enlighten...
The potential to enlighten...
re-Emergence of social interaction
re-Emergence of social interaction
re-Defining the financial experience
re-Defining the financial experience

1950’s
1800’s
Passbook
Industrialize
Credit
Card
Mass
Production
1980s
Debit
Card
2000’s
Internet
& Mobile
Banking
Mass
Automation
Banking Historical View
Banking Historical View
2005 2007 2009
Social
Lending
Visa
Microtag
Social
Banking
Adoption
Social
Networks
Web 2.0 Crowds
Networked
World

BANK 2.0

The Evolution of Strategic Paradigms
The Evolution of Strategic Paradigms
Ref: Reframing Business
Co-producer
(crowds)
Source
Receiver
(market)‫‏‬
Production Relationships Organization of
Value Creation
Critical
Critical
competence
competence
View of
View of
Customer
Customer
Industrialism
Industrialism
Customer base
Customer base
Management
Management
Configurable
Configurable
Social Systems
Social Systems
BANK 2.0
Adapted from Richard Normann

The Future: Banking Process
The Future: Banking Process
 Bank 1.0
Bank 1.0
 Processes are
Processes are internal
internal, and orchestrated by salaried
, and orchestrated by salaried
personnel. Confidentiality and privacy of all information
personnel. Confidentiality and privacy of all information
is paramount in this model.
is paramount in this model.
 Bank 2.0
Bank 2.0
 Process of loan and investment evaluation is
Process of loan and investment evaluation is
crowdsourced to
crowdsourced to community
community.
.
 The firm is responsible to make the right information
The firm is responsible to make the right information
available to
available to facilitate
facilitate processes, yet maintain confidentiality
processes, yet maintain confidentiality
on the rest.
on the rest.
 The firm must provide processes to
The firm must provide processes to validate reputation
validate reputation, to
, to
support community interaction.
support community interaction.

The Future: Distribution Channels
The Future: Distribution Channels
 Bank 1.0
Bank 1.0
 Channels are
Channels are self owned
self owned, including online banking, etc
, including online banking, etc
 Bank 2.0
Bank 2.0
 No centralised channels. Customer acquisition, and
No centralised channels. Customer acquisition, and
retention is
retention is increasingly viral
increasingly viral in nature.
in nature.
 ...provide the right
...provide the right flow of information
flow of information between
between
members.
members.
 ...culture has to be
...culture has to be open and transparent
open and transparent, to engender
, to engender
trust, and promote customer advocacy.
trust, and promote customer advocacy.
 Everyone in the firm is an advocate, as are all customers.
Everyone in the firm is an advocate, as are all customers.

The new Banking Landscape...
The new Banking Landscape...

Evolution of Social Banking
Evolution of Social Banking
Money
Management
Personal
Social
Loans
Business
Social
Loans
Social
Investing
Payment
Solutions

Emerging Signs
Emerging Signs
on the
on the
Business Landscape
Business Landscape

SOCIAL NETWORKS
PARTICIPATIVE CUSTOMER
OBSESSIVE EXECUTION

SOCIAL NETWORKS

Social Network Adoption
Social Network Adoption

Social Network Acceleration
Social Network Acceleration

Credit card hacking, so easy?
Credit card hacking, so easy?

New social order developing…
New social order developing…

Banking Conference agenda in Second Life:
1. Introductions:
2. Overview of current events/financial
Market
3. Brief overview regarding banking in sl
a. What is banking in sl
b. Safety & Liquidity
c. Private Insurance
4. Need for Regulation or at the very least
independently verified transparency.
Experimenting with Avatars
Experimenting with Avatars

Challenging the Norm...
Challenging the Norm...
 Mobile Payments
Mobile Payments
 (OboPay, PayPal)
(OboPay, PayPal)
 Financial Management and Analysis
Financial Management and Analysis
 (Mint.com, Wesabe, Geezeo)
(Mint.com, Wesabe, Geezeo)
 Account Aggregation
Account Aggregation
 (Yodlee, CashEdge)
(Yodlee, CashEdge)
 Bill Pay
Bill Pay
 (Billeo)
(Billeo)

Mobile Payments
Mobile Payments

Financial Management & Analysis
Financial Management & Analysis

Account Aggregation
Account Aggregation

Technology to Bypass Banks
Technology to Bypass Banks
 P2P Lending
P2P Lending
 (Kiva, LendingClub, Virgin Money, Prosper)
(Kiva, LendingClub, Virgin Money, Prosper)
 Online Payments
Online Payments
 (Google Checkout, Amazon Payments)
(Google Checkout, Amazon Payments)
 Social Money
Social Money
 (Buxfer)
(Buxfer)

Peer-to-Peer Lending
Peer-to-Peer Lending

Social Money
Social Money

OBSESSIVE EXECUTION

Mobilised Capability
Mobilised Capability

ICBC bought 20% of Standard Bank recently for
ICBC bought 20% of Standard Bank recently for
R36.7billion (about $6-billion).
R36.7billion (about $6-billion).
The deal is the largest investment by a Chinese
The deal is the largest investment by a Chinese
bank outside China.
bank outside China.
...currently the world's largest bank in terms of
...currently the world's largest bank in terms of
market capitalisation, worth some $319-billion
market capitalisation, worth some $319-billion
Standard Bank group is the African continent's
Standard Bank group is the African continent's
largest lender, with over R1-trillion in assets
largest lender, with over R1-trillion in assets
(approximately $156-billion) and a market
(approximately $156-billion) and a market
capitalisation of R145-billion ($21-billion).
capitalisation of R145-billion ($21-billion).

Engage to Surprise: Scion.com
Engage to Surprise: Scion.com

Idea Ecologies and Customerization:
Idea Ecologies and Customerization:
Where are the banks?
Where are the banks?

SOCIAL NETWORKS
OBSESSIVE EXECUTION
The move towards using the shadow and social based organization is driving new forms of
innovation in the service oriented organization.
Customers co-produce and co-design their experiences with providers though crowdsourcing
to ensure optimal fit of offering and expectation.
Delivering on the renewed mandates require collective, synchronised and
obsessive execution capabilities.

Bank 2.0, The emergence of a new era

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