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Digital transformation as a dynamic capability

Laura Martinez, MBA graduate 2017, returned to the Business School to deliver a session on ‘digital transformation as a dynamic capability’ to our current MBA and Masters students as part of a week of talks for their elective module, Digital Business. This session focused on digital disruption within the banking industry and how Intellect are preparing for this.

Laura works for Intellect in the Intellect Global Transaction Banking (iGTB) CEO office as a Business Manager, focussing mainly on HR and Learning and Development, enabling people to do their job and helping them to do it better. Intellect works with banks to help them transform parts of their software.

What is digital disruption?

The session began by drawing upon Uber as an example of digital disruption. Disruption is owning the customer, not the assets. Uber causes disruption as it is the world’s largest taxi company but owns no vehicles. In particular, Uber has disrupted the taxi market in London. Previously, London cab drivers were expected to pass difficult route tests in order to become a cab driver and were then set up with a job for life. However, Uber removed the need for knowledge of routes and provides drivers easy access into the taxi industry. The negative reaction of London drivers to Uber, inadvertently increased publicity for Uber. Uber’s disruption continues as it moves towards parcel delivery.

Other examples of digital disruption include: Facebook, the world’s most popular media owner but creates no content, and Airbnb, the world’s largest accommodation provider but owns no real estate.

Uber on phone with cars in background
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What drives digital disruption?

Laura explained that the main drives of digital disruption are: mobile, social and big data. In terms of mobile, there is an expectation to be open for business any time, any place. Socially, this enables new levels of customer intimacy and Big Data allows for new analytical opportunities on a massive scale.

Digital disruption and banking

Within the banking industry, digital disruption is apparent as application programming interface (API) allows your software to communicate with others, enabling open banking. Open banking allows customers to share their financial data securely in order to compare their financial options more easily and as a result this increases competition within the banking industry.

Payment innovations have also resulted in no longer needing to know a person’s account number, instead you can pay them simply by knowing their phone number or via methods such as Apple Pay.

Man paying for coffee with iphone using apple pay
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Contextual banking is the most important focus as customers want to have their banking services available any time, any place. As a result, innovations have significantly reduced the need for customers to physically enter a bank. For example, cheques can now be paid into an account by taking a photo on a banking app rather than having to go in to the bank to pay this in.

Laura’s job is to prepare people for these disruptions.

Preparing for disruption in Intellect

Laura shared insights into how Intellect are preparing for disruption. The three main ways in which they are doing this is through: design thinking, taking a robust and agile approach, and having API ready contextual products.

  1. Design thinking

Design thinking is a concept which involves thinking from three different points of view to ensure that you understand exactly what the customer wants and not what you think that the customer wants. From a human point of view considering what is desirable to the customer. From a business point of view considering which designs are viable and from a technological point of view considering which are designs are feasible and can actually be developed.

  1. Robust and agile approach

A way to understand an agile approach is by comparing a car to a rocket. A car is agile because you can react and correct your course. Whereas, a rocket is non-agile because everything is unknown until launch.

Adopting the agile approach allows Intellect to have constant collaboration with their customer and several check points to ensure that they are heading in the right direction. As a result, this approach allows response to change, a working solution and the highest business value in the shortest time as the project is likely to be completed ahead of schedule. In comparison to the waterfall method where a contract is negotiated, a plan is followed and excessive documentation, resulting in deferred business value as a result of a longer delivery time.

Therefore, this approach is more suited for banks because problems can be identified and rectified throughout the project, compared to the waterfall method where problems would only be identified at the end resulting in having to shut everything down if it goes wrong, which is not an option for a bank.

“Not only is it a process, it is also a mind-set”.

  1. API ready contextual products

Intellect are making sure that they meet the demands of the contextual banking world by ensuring that they deliver a product that allows customers to have access to their products any time, any place. In addition, ensuring that the experience is the same, regardless of the device or platform used.

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