How to transform an Incumbent to a Startup
An Insurer to an Insurtech
A Bank to a Fintech
I already wrote about one of the key elements of a successful transformation: Courage.
Courage to make the hard, but the right decisions.
What are right decisions?
If you want to perform like a startup you must create comparable conditions and environments. And one of the most important parameters , possible the most important one is to operate without legacy.
And legacy in today’s startup and digitalisation context usually means:
That said my tip is to replace legacy as radically as possible. Get rid not only of the one or other core system, but possibly rid off most if not all IT systems.
Usually very few have the courage to decide in this direction. Incumbents leave this playground to new startups doing often the very same business compared to the incumbents, but within a legacy-free environment. These startups will be founded with or without the help of incumbents. In the area of Insurance Friday is one example. There are many other examples for banking and insurance, even old ones. Think of First Direct in the UK.
If you are more brave than the standard you migrate some of the very important parts of legacy with light speed like Zurich Germany did with their new core system based on Guidewire and Open APIs.
But if want to ‘play within the Champions League of Transformation’ and of replacing IT legacy you might decide like apoBank did end of 2017.
They declared to migrating all existing IT systems and to start over from scratch with new core, but also with many other new supporting IT systems.
This indeed is a risky decision and never a 100% guarantee for success, but a major step into the right direction, if you ask me.
You need of cause process and organisation amendments as well, but you can now align these to fresh IT systems. And IT is at the heart of everything these days.
We, I don’t know the end of this story. I only can state: Where no risks there no chances! This is also very genetic for a startup.