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12-01-C
CASE 2012-01-C
1
KBC’s Digital Transformation:
A Strategic Response (A)*
Kurt Verweire, Stijn Viaene & Peter De Prins
“Digitization is rewriting the rules of competition, with incumbent companies most at risk of being
left behind. [It is] profoundly changing the strategic context: altering the structure of the
competition, the conduct of business, and ultimately, performance across industries. One banking
CEO, for instance, says the industry is in the midst of a transition that occurs once every 100
years.”1
Brussels, Monday 22 June 2015. Erik Luts, responsible for the Direct Channels at KBC Belgium, got
back to his office after attending a Management Committee meeting that morning. The meeting
had ended with mixed feelings. A few days before, KBC had organised an Inspiration Day. The
event had attracted a lot of attention within the KBC organisation, and attendees had responded
positively to the presentation of all of the new digitisation ideas and projects. In his morning
keynote, Erik had announced that KBC was advancing well with its Digital Programme − called
Klant 2020 − and he had concluded his presentation by soliciting new ideas that could be
incorporated into the next wave of the Klant 2020 programme’s projects.
However, during the Management Committee discussion, Johan Lema, Senior General Manager
Customer Support Retail & Businesses, stated that the staff’s digital awareness was not at all at
the required level. Despite huge investments and efforts, many employees in the branches simply
did not see how all those digital initiatives delivered added value for the customer. Why should
they push those digital solutions if customers were not asking for them? Erik Luts wondered what
his team could do to get KBC ready for the digital age.
* This case is intended to be used as a basis for class discussion rather than to illustrate either effective or ineffective
handling of an administrative situation. The case was compiled from field research.
Copyright © 2015 Vlerick Business School, Belgium. No part of this publication may be copied, stored, transmitted,
reproduced or distributed in any form or medium whatsoever without the permission of the copyright owner.
2
KBC after the financial crisis
KBC is one of the larger financial institutions in Europe, with 36,000 employees serving more than
10 million customers. KBC Group was founded in 1998 by the merger of two large Belgian banks
– Kredietbank and Cera Bank – and a large Belgian insurer, ABB. Immediately after the merger,
the company started to implement its unique bank-insurance model and to expand extensively,
mainly in Central and Eastern Europe.
Since its founding in 1998, KBC Group had shown good financial results to the financial
community. But in 2008, the company was hit hard by the financial crisis: it needed a capital
injection of €7 billion from the Belgian and Flemish governments. In 2009, KBC Group created a
new strategic plan − it now aimed to be a more focused regional European bank-insurance
corporation, with a conservative risk profile and a strategy aimed primarily at retail, SMEs and
mid-cap customers in the following countries: Belgium, the Czech Republic, Slovakia, Hungary,
Bulgaria, and Ireland.2
In the subsequent years, KBC focused on implementing its new strategic plan. It divested many
(international) banking subsidiaries and reduced its CDO portfolio3, while it repaid most of the
state aid it had received. After six turbulent years, the group had restored profitability to pre-
crisis levels, and its capital position and liquidity were robust (see Exhibit 1). The company had
clearly delineated its activity portfolio: deposits, asset management services, loan products,
payments, money and capital market operations and other specialised finance activities, and
insurance. Johan Thijs, CEO of KBC Group, expressed it this way: “We’re now slimmed down and
fighting fit: our focus and area of operation have been clearly marked out, our objectives set and
our structure optimised.”4 Exhibit 2 shows the specific characteristics of KBC’s business model.
In 2014, KBC added a fresh page to its history and developed a new strategy for the future. The
group’s strategic goal was to grow sustainably and profitably through solid risk, capital and
liquidity management, and thus become the reference for bank-insurance in all of its core
markets. Determined to ensure that KBC would never get into financial trouble again, CEO Thijs
launched a company-wide cultural programme − called Pearl − to restore trust and pride with the
employees, and to turn a hierarchical company (with slow decision processes, heavy structures
and a lack of transparency) into a more agile organisation focusing on performance,
empowerment, and accountability. The company also formulated an explicit strategic goal to
create outstanding customer satisfaction through a seamless, multi-channel and customer-
centric distribution approach. The company’s extensive network of bank branches and insurance
agencies would remain crucial contact opportunities for engaging with customers directly, but
the company would fully commit to digitisation as well.
3
KBC’s response to digitisation
On 1 April 2014, Erik Luts was appointed General Manager Direct Channels. As a member of KBC
Belgium’s Management Committee, he had been responsible for HR and Facility Management.
The new appointment included responsibility for KBC’s digitisation initiatives in Belgium. Erik’s
information technology (IT) background had made him very sensitive to all new IT trends that
affected the financial services industry. He knew that digitisation would radically transform the
industry and that new players would challenge the incumbents’ traditional business models. But
he was equally confident that banks like KBC were still in a relatively good position to deal with
the current disruptive digital threats. Erik argued:
Large innovative companies, like Apple and Google, can disrupt big parts of the financial
services industry. But if the industry reacts quickly and decisively, we can counter the
disruption. Preventing an enemy from occupying your terrain is easier than chasing that
enemy out. I think that some competitors still underestimate the danger of digitisation. We
don’t. Our answer is to invest intensively in IT and to listen more carefully to the market and
its customers.
In the course of 2013, KBC Belgium’s CEO, Daniel Falque, had expressed the need to formulate a
comprehensive strategic answer to the digital evolution. He invited trend watchers, technology
gurus, consultants and academics to challenge his management team’s ideas about digital
disruption. Even so, not all of his colleagues were ready to move. The bank still boasted the lowest
cost/income ratio relative to its peers. Was this really the time to make this next big strategic
move? Moreover, online sales were still a very small part of KBC sales in Belgium − accounting for
less than 5% in 2012. And furthermore, internal research had revealed that branch proximity was
still the main driver for selecting a bank. As KBC had one of the most extensive branch networks
in Belgium, this was still a major strength. Finally, some competitors were struggling with their
digital transformation. For example, main competitor ING had been competing with a ‘direct if
possible, advise when needed’ distribution strategy for several years, but seemed to be losing
market share (from 12% in 2011 to 9% in 2012).
A team of some 75 members from a variety of departments and functions was created to
investigate KBC’s situation in terms of digital readiness and to compose a set of fact books that
could help build a case for change with real evidence. The team developed a Customer Behaviour
fact book, a Competitor Analysis fact book, and an IT fact book to document disruptive trends in
the environment and to investigate the implications for KBC.
The main conclusion of this exercise was that KBC’s leading position in Belgium was indeed under
attack from multiple directions (see Exhibits 3 and 4). The challenge for the company was to
defend its leading position as well as to embrace new opportunities for the future. At the end of
4
the day, the team put forward five digital business models as possible response options (see
Exhibit 5) and developed feasibility plans for each scenario.
In October 2013, the Management Committee spent two days discussing KBC Belgium’s
digitisation strategy. The discussions were tough, but the intensity of the discussions helped to
build a cohesive leadership team with a firm common vision. Erik commented:
I admit that, at times, I felt a bit desperate during those discussions. I took the role of the
challenger in the group, and some of my colleagues still reacted very defensively. But overall,
I felt the group was moving. The good thing was that, at the end of our meeting, we all agreed
that we needed to do something. Daniel Falque, CEO of KBC Belgium, played a very important
role in the alignment process. He allowed us to have tough discussions, but he personally
made sure we could overcome the differences in opinions and see the bigger picture. We all
realised that we needed a project − not just my project, but a project owned by the entire
Management Committee. After that 2-day strategising session, it really felt like we had
created a ‘Band of Brothers’ in the Management Committee.
Digital strategy: ‘Klant 2020’
In January 2014, KBC Belgium’s Management Committee presented its digital strategy to the
Group’s Executive Committee for approval. The strategy was named ‘Klant 2020’ (see Exhibit 6).
At the heart of KBC’s strategic response was the transformation of the current branch-based
business model towards a hybrid ‘one-stop shop’ for bank-insurance customers, which would
provide seamless high-value interaction across channels (branch, call center, web and mobile).
The core model was to build a single concept in which all channels (e.g. branches, agents, advice
centers, web, mobile bank) were fully transparent to customers − who choose the channel, not
KBC. This meant re-thinking and re-designing services from a customer’s point of view.
In addition, KBC decided to experiment with some of the other business models that Erik Luts’
team had proposed in anticipation of the 2-day strategy session in October. For example, KBC
would offer payment alternatives for merchants and customers to keep them close and to avoid
being disintermediated (Connector business model). KBC would also set up digital communities
for starters and for farmers and provide each of these groups with advice and money (Community
business model). A direct model would also be created for its Wallonian sister company CBC.5
This direct bank would use a contact center approach offering a limited range of products and
services. Erik commented on all these moves:
We have chosen a transformation approach, not a disruptive one. We simply have too much
to lose. In all our discussions, we’ve come to the conclusion that our size and our branches
are valuable assets that we can leverage. The relationship we have with our customers is our
greatest asset. We earn money where advice plays a critical role. But we have to move from
5
‘brick’ to ‘click’. I believe our people in the branches will be key to making us more digital.
They advise our customers to download an app or to use the internet. This adaptive model
might seem close to our current model, but it’s a big leap forward. It’s a hell of a job to connect
our branches with the new digital technologies. But that’s the option that we have chosen.
Ultimately, Klant 2020 aimed at having customers themselves promote KBC as the reference in
modern customer-centric banking and insurance. Despite the intimacy the bank had achieved
with its branch-based model, customer centricity in a digital world required accommodating the
connected and mobile life the customer leads today. The new programme put the customer’s
needs − not the product, the service or the distribuNon channel − radically at the center. All
channels had to reinforce each other to serve that same customer in intelligent ways.
The Management Committee agreed on a common value proposition for all of the KBC business
units in Belgium. This value proposition consisted of two main elements:
1. Solution-driven
KBC wanted to be the reference by offering the most proactive and personal solutions to
the customers. KBC had traditionally been very strong in offering its customers financial
solutions by integrating advice with high-quality products.
2. Accessible
KBC wanted to be top-notch in fast, reliable and easily accessible financial solutions.
The company refined this generic value proposition in 10 more specific promises (see Exhibit 7),
using these dimensions to differentiate the value proposition between customer segments. For
example, KBC defined various levels of ‘being proactive’, where customers in the private banking
segment received more proactive treatment than mass retail customers. At the same time, top
management pushed for simplification − as they were afraid that the many new digital initiatives
would lead to a significant amount of extra complexity in managing products, services, processes
and information technologies. The Klant 2020 strategy aimed at simplification for the customer
as well as for the organisation’s front- and back-offices.
Klant 2020’s challenge was not just to deliver a set of new and fancy commercial applications, but
rather to strengthen (e.g. by simplification) and leverage existing core capabilities as well as build
new ones for the digital age. The latter entailed building winning capabilities for channel-
customer interactions, hybrid customer journeys and processes, and data analytics & marketing.
6
Programme organisation
KBC Group decided to invest €500 million in the new strategy for the period 2014-2020. About
half of this investment would go to the Belgian unit. The decision to launch Klant 2020 had far-
reaching implications for the Belgian organisation. Erik commented:
The Belgian Management Committee decided to stop separate digitisation projects and limit
all others to the bare essentials, including legal or regulatory obligations. All digital
innovations were grouped under the umbrella of Klant 2020. This was very important
because, when you want to do something as comprehensive as Klant 2020, you need to
synchronise all initiatives. If everybody can launch his/her own project, you wind up with a
bunch of unrelated projects.
The programme also claimed many of the best people from all over KBC as project members.
In only a few weeks, we had mobilised some 250 people (Business and IT) to staff our project
teams. We got a lot of resistance from our middle managers, who lost some of their most
valuable employees. But the Management Committee pushed through. We selected
members based on their power and expertise, not just on their enthusiasm. Those people had
outspoken ideas, sometimes very different from the current consensus. But I was ready to
have open discussions with those people and to gradually convince them of our vision. I
cannot overstate how important the support of my colleagues from the Management
Committee was at that time. This was a tough period for the team and myself. We had to
prove our ‘right to exist’ − and this could only be done by showing results very quickly.
KBC Belgium created an elaborate programme management structure to direct and coordinate
the execution of the Klant 2020 strategy (see Exhibit 8). To promote speed, flexibility and
knowledge exchange, this collection of steering bodies was intended to operate as a network
organisation rather than as a hierarchy. Erik Luts and Johan Lema co-sponsored the programme
at the highest level. They reported back to their colleagues in the Management Committee on a
monthly basis.
The programme included tracks for commercial deliverables in focal businesses as well as tracks
catering to the growth of foundational capabilities. Each track was led by a programme track
manager and a high-level business sponsor.
The first wave of the programme focused on initiatives improving access and solution orientation
in the domains of daily banking and savings & investments. These were the areas in which the
competitors had made the most progress. In a next phase, KBC would also address its value
proposition in other domains of banking and insurance, such as ‘housing’, ‘vehicle’, and ‘my
business’ (see Exhibit 9). Projects had to deliver value that was directly visible to the customer.
This could be in any stage of the customer journey: from awareness creation to purchase to
7
aftercare and loyalty. As of the second wave, more attention would go out to the incremental
development of winning capabilities. The idea was to have more than 250 projects completed (in
project waves every 6 months) by 2020. These projects had to result in commercial deliveries,
improved IT and data capabilities, and in simpler processes for the customer and for KBC. See
Exhibit 10 for the focus of the first three project waves.
The first wave delivered 28 projects improving the customer experience and 25 projects reducing
process complexity and improving the IT architecture. One of Klant 2020’s first product releases
was KBC Touch, an app for managing financials online. By the end of 2014, more than 230,000
customers were using Touch. The app had an average rating of 4 stars on the App Store and an
NPS of 40. KBC also released payment solutions: the KBC Payment Button, for example, was used
by 2,000 e- and m-commerce sites and processed more than 100,000 transactions by the end of
2014. The concept of regional advice centers was also introduced. These centers were staffed
with experts from the various banking areas. Now, if no branch employee was available,
customers calling their branch were automatically directed to these regional advice centers. A lot
of time went into re-thinking processes to work flawlessly across channels. However, project
delivery dates had to be met. “It was incredibly important to establish credibility from the start,”
Erik commented.
Time was not on our side. We pushed our people very hard. We introduced completely new
concepts such as ‘6 months for delivery’, minimum viable product and fail fast to make sure
we got the results asap. Also, simplicity − as well as customer journey and ease of use − was
a constant consideration. For example, a 30-item questionnaire for an online fire insurance
product is simply not acceptable. We pushed for 10. And even that’s still too much in my
opinion. As members of the Management Committee, we relentlessly emphasised the digital
value promise in each and every project. We discussed each project directly with the project
teams in bootcamps. Some people criticised us for micro-managing. But what you see now is
that our burning platform has increased significantly and we get more and more project
requests.
KBC evaluated the programme every 6 months. The PMO collected the facts enabling the Project
Management Steering Committee (PMSC) to address the following questions in their evaluation:
• Do the projects deliver real benefits for the customer?
• Are projects delivered within budget?
• What about the speed of project delivery?
• What about the organisational implications of Klant 2020?
• Do we have people with the appropriate skills in the projects?
• How well do the business and IT departments cooperate to deliver Klant 2020 projects?
• Are projects compliant with internal and external rules? What about security and privacy?
• How is the relationship between Klant 2020 and the existing organisation?
8
• Is the sales force prepared to sell the new tools and updates?
• What about the internal communication of the Klant 2020 projects?
• What about the commitment of the sponsors?
Although there was a strong business case for Klant 2020, the Management Committee had
agreed that, for the first three years of the programme, the evaluation would not focus on
financial ROI.
Project life cycle
Every Klant 2020 project team started with one clear constraint in mind: a time limit of 6 months.
Within this time, the team had to address a real customer need with a new and distinctive service
for a large-enough customer base. Moreover, customers had to want the new experience rather
than have it forced upon them. This meant there would be no compromise on front-end ease-of-
use. User experience and convenience prevailed over technical choices. In the past, more often
than not, delivering an IT-intensive project at KBC had been a painful experience. One of the
biggest problems was that people felt forced into the IT governance straightjacket. Now, with a
deadline of only 6 months for every project, this needed to be addressed. Erik commented:
Our traditional project governance was simply not capable of supporting Klant 2020. It was
slow, complex and bureaucratic. We were also very much used to ‘train-station decision-
making’: the train stopped when we had a result; then, we handed it over to the next party
and the train left for its next stop; and so on. That was neither speedy nor flexible. We needed
to replace the handovers with handshakes. The introduction of multi-disciplinary project
teams was critical. Plus, business and IT would both be present at every important decision
moment, and they would jointly assess business and IT deliverables.
Klant 2020 projects were managed in an agile 6 way, with empowered project teams and
improvements using many iterations. Project steering revolved around showing and evaluating
alignment with the Klant 2020 value proposition early and often. Project teams progressively
professionalised their product artifacts throughout the project life cycle (see Exhibit 11) by good
coaching on content and method and by getting the focus right. Although the commercial logic
was always in the lead, every product release was combined with capability building block
releases. This allowed the capability architecture to grow progressively. Exhibit 12 illustrates this
principle for a hybrid loan application.
Every 6 months, a new wave of projects was launched. The focus domains and the division of the
budget between commercial, capability and other investment categories were based on
environment analysis, strategy update, FinTech7 sector analysis, and service design exercises.
Everyone in the company was invited to come up with ideas. Customer checks, expert coaching
9
and idea pitching were at the heart of the idea selection process. The focus was on making the
case for real customer needs rather than offering solutions. Nominated ideas were further
enriched with competitor, customer life-cycle and value analyses, and then integrated in a
roadmap that was validated by the Management Committee.
In the feasibility phase, agreement was sought on the project’s scope, budget, resources and
timing. Project teams worked on a strong business case, which consisted of the following items:
• A minimum viable product 8 at the right cost with maximum focus on customer
experience;
• Strategic fit with Klant 2020 values;
• Most important risks (e.g. compliance, privacy and security);
• Overview of budget, timing and ability-to-execute;
• Inventory of issues and approaches to solve them; and
• First draft of market introduction.
With the emphasis on getting the customer experience right, preparations for the final feasibility
check included a mandatory review and coaching by a Customer Experience Design Board. The
board provided advice on usability and functional design, graphic design and the quality of the
minimum viable product’s content. One of the principles they kept hammering home was
customer co-creation. With a ‘go’ for feasibility, the project was allowed to go into the execution
phase. There, the product would be iteratively and incrementally developed using a scrum-based
development process with short design / development sprints.9 At the end of every sprint, the
product was put before the product owner as well as the Customer Experience Design Board.
Based on their input, the next sprint would be planned. Non-functional IT testing was done as
much as possible during the sprints as well.
A project was labelled ‘ready for roll-out’ if the new product was deemed good enough for real-
life customers. The project execution could then be transferred to the standing organisation for
commercialisation. The decision would be based on: 1) either a technical product demo in the
customer acceptance test environment, or a detailed customer journey supported by screens and
documents; and 2) a go-to-market assessment. Commercialisation experts for the different
segments were kept in the loop all along the project wave (mainly to be kept informed). Now,
they would work with programme track managers and market segment managers to group
projects in ‘go-to-market clusters’, common storylines that aligned well with KBC Belgium’s
commercial strategy.
10
Roll-out status
Overall, KBC Belgium’s Management Committee was happy with the first results and agreed that
the Klant 2020 Programme was delivering on its promises. You could feel the Management
Committee members’ increased alignment around KBC’s digital strategy. The programme
boasted important and highly visible results and the budget was under control. KBC Touch was a
success. A promising new KBC Invest app was almost market-ready. Management applauded the
improved – although still difficult – collaboration between business and IT. The regional advice
centers had proven to be so successful that the Management Committee had decided to speed
up their integration into the existing Distribution organisation led by Johan Lema.
Still, there were some important concerns, such as speed of delivery. The current approach had
indeed accelerated delivery and increased output, but the Management Committee still felt it
was slow compared to what the competition seemed to be capable of. Also, the programme used
a sponsorship approach to accelerate adoption of the strategy and to facilitate the change in the
organisation. Top management supported the tactic but believed it needed to be embedded
more thoroughly in the organisation. For example, some managers did not take their Klant 2020
sponsorship nearly as seriously as their line responsibilities, and not all sponsors were capable of
transcending their domain. Furthermore, there was no sponsor coalition − everybody acted as
individuals. Sponsors needed guidance and support.
Johan Lema had raised concerns about the lack of front-line staff buy-in for Klant 2020.
Transforming the branch-based KBC business model into a hybrid one-stop shop hinged on the
people in the branches being prepared to inform customers about digital solutions. Johan’s
employee survey showed that they were not ready. He commented:
We needed to spend more effort on engaging with the existing organisation. Most of our
communication initiatives – like the Inspiration Days – had focused on those involved in the
projects. We had not reached the rest of the organisation. Front-office employees, as well as
employees in the product factories, were insufficiently aware of the need for Klant 2020. Our
staff needed to realise that acquiring digital skills was not optional and that they would either
be in or out. It was a matter of digital savviness. We absolutely had to find ways to address
this issue. The whole Management Committee was starting to feel the sense of urgency.
Was the branch staff too product-centric? Was digitisation perceived as a threat only? Could they
not see the future for KBC? Did they not hear the voice of the customer? These and other
questions flashed through the sponsors’ heads. The employees were challenging the programme
in the most fundamental way: was this the definition of customer centricity?
11
Exhibits
Exhibit 1 – KBC Group financial figures (2007-14)
Exhibit 2 – KBC’s business model
Exhibit 3 – Overview of trends analysed in the fact books
Exhibit 4 – Vision Direct Channels (June 2013): Who’s eating our cake?
Exhibit 5 – Five digital business models to protect the business franchise
Exhibit 6 – Klant 2020 response
Exhibit 7 – KBC’s definition of customer centricity
Exhibit 8 – Klant 2020 programme structure
Exhibit 9 – Klant 2020 roadmap focus for 2014-15
Exhibit 10 – Focus of first three Klant 2020 waves
Exhibit 11 – Klant 2020’s project life cycle
Exhibit 12 – Three releases for a hybrid loan application
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CASE 2012-01-C
12
Exhibit 1 – KBC Group financial figures (2007-14) (million euro)
2007 2008 2009 2010 2011 2012 2013 2014
Total assets 355,597 355,317 324,231 320,823 285,382 256,928 238,686 245,174
Total income 9.802 4.827 4.625 8.378 7.310 7.733 7.448 6.720
Operating expenses -5.219 -5.600 -4.779 -4.436 -4.344 -4.248 -3.843 -3.818
Impairment -267 -2.234 -2.725 -1.656 -2.123 -2.511 -1.927 -506
Net result 3.281 -2.484 -2.466 1.860 13 612 1.015 1.762
Equity market capitalization
(billion euro – end of period)
34.2 7.7 10.9 9.1 3.5 10.9 17.2 19.4
Return on equity 21% -18% -23% 12% -6% 1% 9% 14%
Cost/income ratio 57% 64% 55% 56% 60% 57% 52% 57%
Combined ratio (non-life
insurance)
96% 95% 101% 100% 92% 95% 94% 94%
Number of employees (FTEs) 56.715 59.279 54.185 52.949 47.530 37.083 36.177 36.187
Bank branches (in Belgium) 923 879 861 845 844 820 827 783
Bank branches (Central &
Eastern Europe)
1.223 1.411 1.381 1.181 806 828 789 783
Insurance network (in
Belgium)
552 530 498 506 492 481 470 459
Insurance network (Central
& Eastern Europe)
14.573 14.114 11.272
Source: KBC Annual Reports 2007-14
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CASE 2012-01-C
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Exhibit 2 – KBC’s business model
Source: KBC Annual Report 2014, p. 16
Exhibit 3 – Overview of trends analysed in the fact books
Source: KBC Internal documents (2013)
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CASE 2012-01-C
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Exhibit 4 – Vision Direct Channels (June 2013): Who’s eating our cake?
Source: KBC Internal documents (2013)
Exhibit 5 – Five digital business models to protect the business franchise
Source: KBC Internal documents (2013)
15
Exhibit 6 – Klant 2020 response strategies
Source: KBC Internal documents (2014)
Exhibit 7 – KBC’s definition of customer centricity
Source: KBC Internal documents (2014)
16
Exhibit 8 – Klant 2020 programme structure
Source: KBC Internal documents (2014)
Exhibit 9 – Klant 2020 roadmap focus for 2014-15
Source: KBC Internal documents (2014)
20
Footnotes
1 Hirt, M. & Willmott, P. (2014) “Strategic Principles for Competing in the Digital Age,” McKinsey Quarterly, May, p. 1. 2 KBC Annual Report 2010.
3 A Collateralized Debt Obligation (CDO) is a security whose value is collateralized (i.e. 'backed') by a pool of underlying fixed-
income assets. It is an investment that yields a regular return, its payments being derived from the performance of this pool.
Investment banks started to trade the bonds into the institutional investor market. Many of those CDOs were mortgage-backed
securities. During the housing crisis in the US in 2006 and 2007, these CDOs were downgraded by the ratings agencies. When the
financial crisis peaked in 2008, crippling the banking sector, banks found themselves with a trillion dollars tied up in now worthless
assets. Of this, around half ($500 billion) was tied up in CDOs.
(Source: https://sites.google.com/site/sparemoments/my-articles/cdos---their-role-in-the-financial-crisis).
4 KBC Annual Report 2014, p. 12. 5 KBC is the brand name that KBC Belgium uses in Flanders; CBC is KBC Belgium’s brand for the southern part of Belgium (Wallonia).
6 Agility refers to the ability to create and respond to change by balancing flexibility and structure. Agile project management
methods are inspired by the Manifesto for Agile Software Development, written in February 2001 at a summit of 17 independent-
minded practitioners of several programming methodologies. The agile manifesto values individuals and interactions over
processes and tools, working software over comprehensive documentation, customer collaboration over contract negotiation,
and responding to change over following a plan. (Source: http://www.agilemanifesto.org/).
7 Financial technology or ‘FinTech’ is a line of business based on using software to provide financial services. Financial technology
companies are generally start-ups founded with the purpose of disrupting incumbent financial systems and corporations that rely
less on software. (Source: http://www.whartonfintech.org/blog/what-is-fintech/)
Accenture reported that investment in FinTech companies grew by 201% globally in 2014, compared to 63% growth in overall
venture-capital investments, confirming the sector as a hot ticket.
(Source: http://www.fintechinnovationlablondon.net/media/730274/Accenture-The-Future-of-Fintech-and-Banking-
digitallydisrupted-or-reima-.pdf)
8 The term minimal viable product refers to ‘that version of a new product which allows a team to collect the maximum amount
of validated learning about customers with the least effort’. This definition was coined by Eric Ries, creator of the Lean Startup
methodology. Ries emphasises that the use of the words ‘maximum’ and ‘minimum’ is not formulaic and that it requires judgment
to figure out, for any given context, what minimal viable product specification makes sense.
(Source: http://www.startuplessonslearned.com/2009/08/minimum-viable-product-guide.html)
9 The agile development process that KBC used was based on “Disciplined Agile Delivery” by Scott W. Ambler and Mark Lines
(2012). For a short introduction video on scrum-based agile development, see https://www.youtube.com/watch?v=XU0llRltyFM.