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by Niro Nirmalan

@niroism

Me

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Startup Mentor

16 yearsworking in digital

Growth Hacker

Fintech Enthusiast

Love Cars

@niroism

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What is the Best Selling Car in the US?

GM Ford

Dodge?

Some other car

Toyota Camry

The Best Selling Car in the US is…

Jan 2016 US car sales

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How?

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Toyota’s entry into the US Market

Toyota Corolla 1968 (Sub-compact)

Typical 1968 Muscle Car

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Traditional Business Thinking of US Car Manufacturers

Focus on the best customers

Focus on the highest margin products

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Continued allocating Resources to build new features for these segments (Sustaining Innovation)

£

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Toyota knew that selling cheaper cars meant tighter margins for them

$$$Manufacturing cost

$$$$Car retail price

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So they re-engineered the car manufacturing process – Toyota production system

Just-In-Time Systems

Lean Manufacturing Kaizen teams(Continuous improvement)

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This lead to cheaper manufacturing costs and better margins for Toyota

$$Manufacturing cost

$$$$Car retail price

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And once they captured a significant stronghold over the lower end of the market, Toyota moved upmarket

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The incumbents could not compete with Toyota’s Lower cost, High Feature cars as their margins would not allow it

Toyota Car Sales Incumbent Car Sales

DisruptiveInnovation

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Path to Disruption

Enter low margin niche ignored by market incumbents

Innovate to make the niche market segment profitable

Move upmarket and compete with market incumbents

Become new market incumbent

Beat incumbents on price and service

Disruptive Innovation – Clay Christensen

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Disruptive innovation can hurt if you are not the one

doing the disrupting

- Clay Christensen

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Path to Disruption

Enter low margin niche ignored by market incumbents

Innovate to make the niche market segment profitable

Move upmarket and compete with market incumbents

Become new market incumbent

Beat incumbents on price and service

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Enter low margin niche ignored by market incumbents

International Payments

P2P Lending

Personal Finance Management

Cloud Accounting

Banking Disintermediation

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Path to Disruption

Enter low margin niche ignored by market incumbents

Innovate to make the niche market segment profitable

Move upmarket and compete with market incumbents

Become new market incumbent

Beat incumbents on price and service

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Innovate to make the niche market segment profitable

Onboarding - Automate form completion

Usage of Companies House API to autopopulate form

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Innovate to make the niche market segment profitable

Snap ID for real time KYC

Onboarding – Real time KYC

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Innovate to make the niche market segment profitable

Video call with live photo and ID capture for KYC

Onboarding – Real time KYC

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Innovate to make the niche market segment profitableSolution for thin credit file applications

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Path to Disruption

Enter low margin niche ignored by market incumbents

Innovate to make the niche market segment profitable

Move upmarket and compete with market incumbents

Become new market incumbent

Beat incumbents on price and service

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Move upmarket and compete with market incumbents

Banking re-intermediation - Marketplace bank?!?

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What should Banks do?

The Innovator’s Dilemma

Sustaining Innovation Disruptive Innovation

• Do new better things• Focus on niche segments and unproven

markets

• Do what we always did but better• Focus on high margin products

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What should Banks do?

The Solution – Do both

Sus

taining In

novatio

n

Disruptive In

novatio

n

Collaborate with startups

Enter adjacent or completely new marketsFast follower

Kaizen teams

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Any Questions?