Page 266 - SBL Integrated Workbook STUDENT 2018

Chapter 20

Disruptive technology

Disruptive technology relates to instances where technology is used to
fundamentally change and ‘disrupt’ the existing business model in an
industry.

Financial technology (commonly known as Fintech) is, for example,
completely disrupting the traditional banking sector.

3.1 Advantages of disruptive technology

 better use of data – providing better understanding of customers and giving
customers a wider choice

 a frictionless customer experience using elements such as smartphone apps to
provide a broad and efficient range of services

 more personalisation of products/services to individual customers

 the lack of a physical presence (giving savings in associated overheads and
operating costs)

 access to cheap capital to fund growth – lenders find disruptors attractive due to
their high potential growth rates.

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