The document discusses the impact of digital technologies on business transformations, emphasizing key drivers such as the Internet, mobile applications, and analytics. It highlights the challenges faced by incumbents due to disruptive innovations and changing consumer demands, along with the importance of understanding market dynamics and competition. The paper also examines the evolving landscape of financial services amid technological advancements.

1. 1
Bank
Digital
transforma0on(s)?
Cass
Business
School,
9
April
2015
Gianvito
Lanzolla,
PhD
Professor
of
Strategic
Leadership,
Cass
Business
School,
London,
UK
g.lanzolla@city.ac.uk
…digital
technologies
driving
business
transforma0ons
• Internet
• Apps
• Analy.cs
• Cloud
• E-­‐commerce
• Mobile
• Internet
of
Things
• …

2. 2
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

3. 3
• Innova.on:
the
impact
of
inter
‘industry’
connec.vity
• Value
proposi.ons
transforma.ons:
products
becoming
more
informa.on
based
Digital
transforma0ons:
two
trends

4. 4
…new
lenses
are
required
• Disrup.ons
• Network
effect
&
the
long
tail
• Convergence
• (Near)Zero
marginal
cost
compe..on
The
underlining
transforma0onal
forces

5. 5
It
is
not
always
like
this…
Performance
Time
Old
Technology
New
Technology

6. 6
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

7. 7
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
Sustaining
Innova.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

8. 8
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

9. 9
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

10. 10
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

11. 11
• 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…

12. 12
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
g.lanzolla@city.ac.uk