DK News

You don't have to be a start-up to be a digital disruptor

4th March 2016

Stories about digital disruption are flavour of the month at the moment. It seems the established players in UK financial services are under attack. Start-up fintechs are everywhere. Lots of these start-ups will fail, of course, but a great many are already succeeding and are making significant inroads into long-established markets.

So what can the established players do to combat this? The threat is very real - but so are the opportunities and the incumbents actually have the upper hand. They have the resources, the budgets and, most importantly, they already have the customers - it's just a question of keeping them engaged. New technology simply changes the way customers behave and business models just need to adapt to reflect this. Established players can thrive if they embrace change and are not afraid to adopt new tactics.

Established institutions will only fail if they allow their size to become a burden rather than the advantage it should be. Slow decision making, often caused by organisational and political resistance, can mean a failure to adapt leading to a slow decline. Market leaders can have a tendency to play it safe, fearing innovation, worried that change will damage existing business models. For example, Kodak execs invented the technology behind today's digital cameras. Fearful that this new tech would damage their camera film business, the product was left for others to develop, ultimately leading to the point where Kodak went bankrupt.

There's no doubt that a new fintech wave is upon us, but the very same technology is available to all, digital gives everyone the same opportunities to innovate. The disrupted can easily become disruptors themselves by using the latest technology frameworks to reinvigorate their businesses and reengage with their customers. And if that seems a bridge too far, then the same technology can enable established players to partner with the disruptors. Examples include new digital bank Fidor which launched in the UK last year with plans to integrate third-party services such as peer-to-peer lending, crowdfunding and multi-currency investments, and Aegon's use of Digital Keystone's Adaptive Portal technology to seamlessly integrate their pension and retirement platform with advisor network back-office systems.

Digital shouldn't be seen as a threat, the biggest risk is doing nothing.

Digital Keystone helps financial institutions fast track innovation initiatives. We work with established players as well as fintech start-ups to create digital experiences that exceed customer expectations. We help our clients to deliver digital experiences that transform the way they engage with customers on mobile, tablet and desktop.

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