In Defence of Liberty

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Digital Disruption


Digital disruption is affecting the banking industry. (Edited: Wikimedia Commons)

Digital disruption is the transformation of an industry when new digital technologies, and the new business models that can be sustained with that technology, affect the prior means of providing goods or services to customers.

When people can carry phones in their pockets, it is disruptive to the established network of fixed-line telephones. When music can be downloaded and exchanged, this reduces the need to go into a music store and purchase a physical disc. When a website and mobile application allows people to find homely rooms to stay on holiday, it undermines the existing set of hotels and accommodations. New products can quickly eclipse the extant goods and services.

“Disruptive to the banking industry”

This potent and rolling wave of innovation is lapping against the financial services industry. As the consultancy firm Deloitte highlighted [1], the branch network of banks and building societies has its origins in 19th century Europe. Now, it is possible for a bank to converse with customers solely through mobile self-service, as the Atom Bank demonstrates.

Mark Mullen, the CEO of Atom Bank, wants the digital-only firm to be “as disruptive to the banking industry as Uber has been taxis”. Atom Bank has received a $68m investment from Spain’s BBVA. Their mobile application has been created by software developers who have previously designed computer games [2]. The British Banking Association, in their Way We Bank Now report [3], foresees in 2020, British customers using mobiles to manage current accounts 2.3 billion times, which is more than internet, branch and telephone banking combined. Support services must become more orientated towards assisting customers with mobile apps.

(Video: Accenture)

As Nigel Jones at Ad Age notes [4], the Polish mBank approves loans within 30 seconds, whilst discussing its mortgage plans over Skype and printing no bank statements.


Digital disruption is powerful and inexorable, and can quickly upend entire industries. Digital technologies allow for the creation of simple, swift and cheap financial products, with digital-only banks being unburdened by a branch network or telephone services. It is up to existing financial institutions to keep their customers satisfied, whether they walk into a branch or manage their money through their mobile.


[1] Deloitte, 2014. Digital disruption: Threats and opportunities for retail financial services. Available from: [Accessed: 8th January 2016]

[2] Scuffham, M., 2015. Atom Bank taps video game technology to win mobile customers. Reuters. Available from: [Accessed: 8th January 2016]

[3] BBA, 2015. Mobile phone apps become the UK’s number one way to bank. Available from: [Accessed: 8th Janaury 2016]

[4] Jones, N., 2015. Disrupt or be disrupted: The Finance Industry Is Waking Up. Ad Age. Available from: [Accessed: 8th January 2016]



This entry was posted on January 10, 2016 by in Other Interests and tagged .
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