As Founder of FDH Financial Holdings, a homegrown Malawian financial institution, Dr Thomson Mpinganjira takes a keen interest in industrywide innovations. This article examines the issue of digital disruption, identifying how technological advancements can be leveraged to expand boundaries and increase profitability.
What Is Digital Disruption?
The word ‘disruption’ infers a negative connotation, but in the context of digital disruption, it is only to the detriment of those determined to ignore or resist the need for change.
Digital disruption is about transformation: the need to embrace new ways of doing things to the benefit of a business, contributing to its success.
Digital disruption occurs where business models are used in conjunction with emerging digital technologies, assessing the value of existing services and products offered within a particular industry. In the context of digital disruption, ‘disruption’ means the emergence of new digital products, businesses and services that disrupt existing markets, sparking a need for re-evaluation and change.
The demise of Kodak is a prime example of digital disruption in action, and the catastrophic impact it can have on a company that fails to adapt and evolve. Kodak monopolised the camera industry for most of the 20th century, but failed to keep up with changes in customer needs and expectations, or keep pace with changing customer identities. The result was that, when digital cameras hit the high street, Kodak’s profitability plummeted. What was once the remit of professional photographers suddenly became available to all, marketed as a fun, life-friendly gadget, sparking a massive market shift.
Kodak continued to market its products to female consumers, completely missing out on this new, gadget-friendly male demographic. Digital technology brands implemented high-profile marketing campaigns to this new breed of photographer, creating a massive new client base that bypassed Kodak completely.
Kodak failed to make the leap from traditional film to digital, enabling Canon and Sony, with their innovative technologies and approaches, to cash in on this new influx of consumers. Kodak continued to stick to its guns, resisting change and refusing the inevitable force of digital disruption, until 2012 when the company filed for bankruptcy.
Companies must not only embrace digital disruption, but actively plan for it. They must stay ahead of the curve, recognising signs of digital disruption emerging in their respective industry, enabling them to press ahead of the pack and work with the flow rather than against it. Not only does this prevent companies losing traction, but it also sparks further growth and increased business opportunities.
Digital disruption is driven by evolving consumer identities and needs. It is vital for companies to recognise and fulfil market demand, not only keeping existing customers happy but also expanding their audience by attracting new consumers to their brand.
FDH Financial Holdings subsidiary FDH Bank is a leading commercial bank in Malawi today. Founded by Thomson Mpinganjira in 2008, FDH Bank provides a variety of innovative, user-friendly financial products and services, maintaining a leading edge over its rivals by embracing digital disruption, amassing total assets of more than MK218 billion.
FDH Bank is credited with delivering financial inclusion and development throughout Malawi via its revolutionary digital banking platform. By recognising the potential of Fintech advancements, FDH Bank continues to widen its market share, attracting new customers with innovative products like FDH WhatsApp Banking, a groundbreaking new service that enables customers to transact safely and securely from within the WhatsApp chat app.
FDH Bank offers a variety of different accounts to meet the diverse individual needs of its corporate and private clients, including:
- Foreign Currency Denominated Accounts, enabling resident and non-resident non-exporters to retain 100% of Forex receipts within their FDH Bank account to convert into cash when needed
- FDH Personal Current Accounts, offering a range of flexible payment options including borrowing, loan and overdraft facilities
- FDH Business Current Accounts, providing banking facilities for commercial clients
- FDH Diaspora Accounts, for Malawians living and working overseas, enabling them to maintain a bank account in Malawi
Whereas Kodak serves as a stark reminder of the dangers of ignoring consumer demand, FDH Bank is a shining example of the potential advancements possible through embracing digital disruption as a catalyst for positive change, expanding client bases, increasing revenues, and delivering value and innovation to new and existing customers.