9Adapt or Die

Neither RedBox nor Netflix are even on the radar screen in terms of competition. —Blockbuster CEO Jim Keyes, speaking to investors in 2008

Disruption is not new. When you look back over the last couple of centuries, you see time and again evidence that incumbents underestimated the impact of change on their industry. In the banking sector today, the huge potential changes we’re facing are no longer just focused on front-end user experiences. We’re seeing currency, capital markets, wealth management, bank licenses, labour force and economics all under attack from new emerging systems, paradigms and technologies.

I guess the question should be asked, though: when looking at the likes of Kodak, Blockbuster, Borders, Yellow Cabs, record labels and cable TV, when could we have known with certainty that they were going to be disrupted? What are the warning signs, and are there those same indicators for banks and financial institutions today?

The biggest question probably is: why is it, when faced with disruption, incumbents don’t react faster? The threat of Amazon to the retail sector has been clear for over a decade, but despite their steady increase in capabilities and reach, incumbents who had plenty of time to plan a response have mostly been left reeling1. It’s like a mixture of disbelief in the speed of the change combined with fear over being disrupted, which often creates a condition like a deer in the headlights of an oncoming vehicle. You know you need ...

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