This presentation is from Adaptive Lab's Bye Bye Banks? book launch and disruption in finance panel event. Author and MD of Adaptive Lab, James Haycock, used this presentation to set the scene of the retail banking landscape in light of the digital revolution. It explores the changes and disruption currently sweeping the banking sector and outlines what traditional players can do to safeguard against fast emerging tech competitors who are taking their share of the financial market. Key messages and themes from the book are explained including: - The unbundling of retail banking services by startups. - The three stage scenario that sees traditional banks being displaced, diminished and dis-intermediated. - The 10 point Beta Bank operating model - a model that incumbents can follow to design a business that can survive the digital disruption. You can learn more about Bye Bye Banks? and view other related content at the Adaptive Lab website: http://bit.ly/1KXJsQX We also curate a Flipboard magazine that presents the latest articles on disruption in financial services. Expect stories on new entrants, technology and consumer behaviours as well as innovation news from established players. We think it's well worth following: http://bit.ly/1gqc226

1. @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

2. 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

3. 3 | Bye Bye Banks
55 450m $100bn

4. | Bye Bye Banks4
“software is eating the world”
Marc Andreessen

5. | Bye Bye Banks5
Could banking be next?

6. | Bye Bye Banks6
“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”

9. 9 | Bye Bye Banks

10. 10
Displaced, diminished, dis-intermediated
A three stage scenario that is underway
| Bye Bye Banks

11. | Bye Bye Banks11
Displaced

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Diminished

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Dis-intermediated

14. 14
Displaced, diminished,
dis-intermediated in Telco
| Bye Bye Banks

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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

30. 30 | Bye Bye Banks

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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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34. | Bye Bye Banks34

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Bank
A
Card 2
Card 1
£ Credit
card Co.
Card 3 Bank
B

36. | Bye Bye Banks36

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Dis-intermediated

38. 38 | Bye Bye Banks

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Bank
A
Bank
B
Intermediary

40. 40 | Bye Bye Banks| Bye Bye Banks

41. | Bye Bye Banks41
“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

42. 42
People, culture and technology
(why change is hard)
| Bye Bye Banks| Bye Bye Banks

43. 43
69% banking executives didn’t believe retail banks are able
to react quickly enough to changing consumer needs.
Adaptive Lab / Research Now
| Bye Bye Banks

44. | Bye Bye Banks44
79% of banking executives felt their leadership weren’t
knowledge about digital.
Adaptive Lab / Research Now
| Bye Bye Banks

45. 45
“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
| Bye Bye Banks

46. | Bye Bye Banks46
“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
| Bye Bye Banks

47. 47
How the incumbents can respond:
Launch a Beta Bank
| Bye Bye Banks| Bye Bye Banks

48. 48
Rethink
A Beta Bank is a fresh start, redesigning a bank
from the ground up.
| Bye Bye Banks

49. | Bye Bye Banks49 | Bye Bye Banks
Separate
A Beta Bank is distinct from the parent bank
with a different HQ and independent leadership.

50. 50
Experiment
A Beta Bank is an experiment in new products,
services and ways of working.
| Bye Bye Banks

51. | Bye Bye Banks51 | Bye Bye Banks
Digitise
A Beta Bank is a digital business from the ground
up.

52. 52
Design
A Beta Bank prioritises investment in customer
experience and uses design to solve problems.
| Bye Bye Banks

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Focus
A Beta Bank isn’t everything to everyone. It
offers a few, differentiated products for a well-
defined customer.

54. 54
Open
A Beta Bank is transparent and open. Its
business model is clear and its pricing simple.
| Bye Bye Banks

55. | Bye Bye Banks?55
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

61. | Bye Bye Banks61
Are you ready to launch
your Beta Bank?