It’sOurs.

Insights from Kiwibank’s digital business journeyDigital Disruption Summit, August 17 2016, Auckland

• Digital disruption moving into new industries• Why this is happening – the five forces driving an internet step-

change• What this means for organisations• How Kiwibank is responding

peter.fletcher-dobson@kiwibank.co.nz @peterfd

Our story

“Kiwis making Kiwis better off”

This disruption thing…

Some of the digitally disrupted

Home Entertainment

Book Retailing

Accommodation

Classified Advertising

Taxis

Financial services is next

Fintech investment soaring

Company lifespans being reduced

Reduced from 61 years in 1951, to estimated 13 years in 2025

Exponential organisations

Snapchat and Occulus Rift hit billion dollar cap in 2 years versus 20 years for typical Fortune 500 companies

Perils of being on the wrong track

from here…

…to hereHow do organisations move

Traditional organisations can’t keep up with competitors using business, and operating, models on exponential trajectory

Internet undergoing step-change

Information

Content

Assets

Value

Assets

Value

IoT

AI

APIs

BlockchainComputing power

Continuous exponential growth

APIs and IoT creating true Big Data and

driving AI

Internet evolves from information to value &

asset transfer

Five transformational forcesNOW FUTURE

1. Computing power growth

2. APIs enabling platform businesses

Companies like Facebook, Twitter and Xero used APIs to turn killer apps from products into platforms

.

Graph by ProgrammableWeb

Generating value without inventory

Mondo Bank

Taking openness to new levels

3. Artificial Intelligence

4. Internet of Things

5. Blockchain – disrupting trust

How value transfer works now

A

B

How it works with BlockchainB

Arcade City – disrupting Uber

Slock.it: Bridging physical and virtual

Instantaneous trading

What if…?• FX was as instantaneous and free as a “cross-border email”

• 70% of small landowners globally are protected from unscrupulous dictators

• Half a trillion dollars in remittance fees instead of going in transaction fees went to people who needed the money

• Musicians were automatically and directly paid as soon as their music was downloaded

• The provenance of any produce or product was instantly and immutably trackable

How does an organisation cope?

Act like a genius

“The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still

retain the ability to function.” F Scott Fitzgerald

Being an ambidextrous organisation

Horizon model from The Alchemy of Growth, Baghai, Coley and White, 2000

29

1 “Optimise

the business”

2 “Evolve new capabilities”

3“Invent future

business”

Growth

Horizon 1 Known

Horizon 2 Partially known

Horizon 3 Unknown

Time to

impact

Known vs unknown

30

Certainty

UncertaintyGrowt

h

Time to

impact

Horizon 1 Known

Horizon 2 Partially known

Horizon 3 Unknown

It never feels like a perfect time…

…to jump into the unknown

“Do not wait until the conditions are perfectto begin. Beginning makes the conditions perfect.” Alan Cohen

So what are we doing?

Going back to start-up roots

Going back to start-up roots

Embracing Fintech

https://www.youtube.com/watch?v=gzhvNujfcGA

Evolving joining a bank

Pic of selfie prototype

Bots and data

Future focus

Take outs1. World is changing at an exponential rate – more change in next 30 years

than in past 100

2. We believe New Zealand is ideally placed to leverage these global changes

3. Not about a digital strategy – but a strategy for a digital world

4. Being ambidextrous the new normal for organisations

5. Use constraints to maximum advantage

6. You can’t plan your way to or wait for the perfect place

Thank you.

@peterfd