The Bankwatch

Tracking the consumer evolution of financial services

Posts Tagged ‘business model

‘The Shape of Business – The Next 10 years’ | CBI

Confederation of British Industry (CBI) have issued this paper. It is a short but useful discussion on what business ought to consider in the UK, but my reading suggests most western economies. It touches on the main categories of concern of business, people issues, environmental, partnerships, supply chain and technology

Here is an excerpt from the Table of Contents, followed by the conclusion.

Download: The shape of business – the next ten years (PDF 2MB) | CBI

The Changing Business Environment

  1. Changing finance and capital conditions
  2. The decline of trust in business and markets
  3. A less benign macroeconomic environment
  4. Social and demographic change
  5. Sustainability and resource issues
  6. Technology trends

The Business Response

  1. Capital and investment
  2. Workforce
  3. Organisation and location
  4. Governance and sustainability

The next decade will be one of fundamental change for businesses in the UK and the actions business takes will begin to have a significant impact on the shape of the UK economy.

In ten years time, businesses will typically be involved in a range of collaborations, partnerships and joint ventures, supporting investment finance, R&D and innovation, training and new organisational structures. There will be much more rigour in identifying investment and innovation projects for funding and businesses will have outsourced the next level of activities, including many specialist tasks. The workforce will be more diverse, highly flexible and mobile, making the most of new ways of working and using more business-relevant professional skills. This will leave organisations focused on a smaller core of people and projects, supported by a much wider range of individuals and businesses around the periphery. Building and maintaining trust with business partners and the public will become critical to the smooth operation of these structures, and compliance with governance and sustainability standards will be a major objective. Effective management will be the key determinant of survival and success.

These changes will have a range of implications for the UK economy, which have been highlighted in the previous section. Taken together, we identify the following as the main areas of concern and opportunity:

  • In the short term, the UK will see slower (but more sustainable) growth and a longer climb out of recession, with elevated unemployment for an extended period, and the socio-economic consequences this will bring
  • An increased number of burdens coalescing on business at the same time will increase business costs, reducing profits and tax revenues
  • Until new systems of governance, collaboration, risk management and SME financing come into place, and start to work effectively, businesses are likely to miss opportunities for more radical innovation and the UK may fall behind some of
  • its competitors
  • But, by the middle of our five to ten-year time frame, these same systems will make the UK more productive and competitive and our expertise in implementation will be valuable in its own right
  • New business structures, new ways of working and new relationships with employees will make businesses even more flexible and this will enhance what is already our most important competitive advantage
  • Towards the end of the decade, some key aspects of the UK economy may ultimately fall under the control of overseas governments, and as market opportunities shift, current prominent businesses in both services and manufacturing may move substantially overseas.

Written by Colin Henderson

November 23, 2009 at 22:21

Book | Business Model Generation: Osterwalder and Pigneur

It was exciting to open the mailbox tonight and see my copy of Business Model Generation.


I first met co-author Alex at LIFT in Geneva. He and his colleagues have performed much work focused on the aspects of business model creation, and in particular financial services. I was fortunate enough to be involved in a small way when Alex opened up the creation of the book online to what became 470 other online participants. The result is fabulous and a different kind of book … its more of a handbook for your business model.

I have been speaking here for two years that banks need to re look at their model. The current mid/post crisis situation for banks is dramatically different for them, when compared to the situation when they entered the crisis. The nature of consumer demand, and the mix of product requirement is different. Consumers are paying down debts, and taking a longer view of their finances. At the same time, Banks are looking at tighter liquidity requirements, and higher capital requirements all of which play into their ability to manage new product volume. Cost cutting will not be enough …. it will require drastic cost elimination in many cases to re-orchestrate the business model for the new normal. In this atmosphere, the old business model with tweaks will not, in my view, be enough. Amongst the financial utilities who are managed by government there is a real need and opportunity to become the innovator in financial services that is recognised by customers for being with them in this new world.

The book covers many aspects:

  • Canvas: definition of a business model
  • Patterns: understanding new models, eg free, open source, multi sided, long tail
  • Design: tools and methods
  • Strategy: evaluation and management
  • Process
  • Outlook and Afterward

It is a differently laid out book, and it is more of a handbook than a reference text. It is the kind of book you will retain on the office bookshelf and pick up often.

This is the perfect time to revisit banks’ business models, and Business Model Generation is in my view a great place to start thinking about that. I recommend it, and there is a complete 1st chapter available to download so you can decide for yourself.

Well done Alex and Yves.

PS .. in deference to the American FTC and their new requirement announced today, that people should believe what they say, ahem, I note that I believe the above and am not remunerated in any way.  Go Alex!

Written by Colin Henderson

October 6, 2009 at 21:14

The Best Business Model in the World

Umair zeros in on a real point that is precisely correct.  The point here is not what you may or may not think about prezi … the point is what prezi’s users think. Then relate that to what customers think of your bank’s products.

The best business model in the world is also the simplest: make stuff that’s insanely great

Everybody’s searching desperately for business model innovation: Detroit, newspapers, record labels, banks. No market is left untouched, no value proposition sacrosanct.

Yet, the best business model in the world is also the simplest: make stuff that’s insanely great. Stuff that’s insanely great does what Prezi does — amazes, enriches, and inspires. That kind of stuff doesn’t need a hard sell, a new market, or a convoluted product range. It just needs to be.

Written by Colin Henderson

July 27, 2009 at 14:54

Conservatives propose radical changes to banking regulation in UK

There are some dramatic proposals contained in the upcoming white paper from the Conservatrive opposition [UK] this week. They make sense and go to the core of the flexibility that allowed banks to become too speculative. They address leverage, and the investment banking/ retail banking integration challenge. The Conservatives are larely expected to win the next election, sometime in the next 12 months.

Tories say break up the big banks | The Times

He will be clear, however, that the Bank should have powers to order banks and other financial institutions to hold more capital when times are good, so that they are well-placed to cope with the losses that arise during downturns.

These counter-cyclical capital requirements, one version of which was the so-called dynamic provisioning used for Spain’s banks, are seen by Mervyn King, the Bank governor, as an essential part of the “macro-prudential” toolkit.

The most controversial part of Osborne’s proposals, however, will be his response to the “too big to fail” problem for banks. He is expected to back King’s view, set out last month, that large and complex banks that combine retail banking with risky investment banking, should either not have their deposits guaranteed by the taxpayer or be discouraged by even larger capital requirements.

Osborne will make clear that he believes some banks were allowed to become too big. He will give the Bank the powers to intervene – and, if necessary, break up – banks whose size and structure threatens financial stability.

Written by Colin Henderson

July 19, 2009 at 00:32

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