kbc’s digital transformation: a strategic s digital transformation: a strategic response (a) *...

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CASE 2012-01-C

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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.

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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.

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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

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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

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‘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.

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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

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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?

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• 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

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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.

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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?

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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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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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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?


Exhibit 5 – Five digital business models to protect the business franchise


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Exhibit 6 – Klant 2020 response strategies


Exhibit 7 – KBC’s definition of customer centricity


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Exhibit 8 – Klant 2020 programme structure


Exhibit 9 – Klant 2020 roadmap focus for 2014-15


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Exhibit 10 – Focus of first three Klant 2020 waves


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Exhibit 11 – Klant 2020’s project life cycle


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Exhibit 12 – Three releases for a hybrid loan application


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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.

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