A Phenomenal Period of Disruption

The law of accelerated returns says the rate of technological growth is exponential. Instead of 100 years of technological growth in the 21st century we might have 20,000 years of technological change in current technology year terms. This implies a world of increasing rates of disruption with profound implications for the way we work and play.

We are already living through an amazing period of transformation. More than 4 billion people around the world use cell phones and for over 10 percent of them the Web is a fully mobile experience. Facebook has a population larger than many nations. Cloud computing is redefining how we use technology. The pace of change is becoming a blur.

This creates the potential for rapid changes in markets on an unprecedented scale. For financial institutions already struggling with systemic risks, we have to add another - the risk of business and operating models becoming obsolete, not just in years, but at some point in months, weeks or even days.

But that risk is also an opportunity to redefine the banking industry and lift it from one of the worst crises in living memory to create a new, more vibrant future.

Take PayPal as an example. While banking remains stagnant, PayPal are expanding their business model through a project with FourthWall Media to take payments into the home leveraging the potential of TV as the next digital commerce portal - a classic Blue Ocean strategy.

Banking has many challenges - debt crises, regulation, public dissatisfaction and Wiki Leaks. But there are huge opportunities to tap new markets, break down entrenched silos through collaboration, leverage new knowledge resources, experiment with data on an unprecedented scale, buy technology 'on the go' and redefine business models to create alternative revenue streams at significantly lower cost.

These opportunities are there for the taking. How will the industry respond?

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