Disruptive innovation

Disruptive innovations either create new markets or reshape existing markets by delivering relatively simple, convenient, low-cost innovations to a set of customers who are ignored by industry leaders. Disruptive innovation brings in a new class of customers 'non consumers' or caters to 'overshot' customers who do not need performance, quality or product improvements that are focused by established companies - 'sustaining' innovations mainly serving the high margin customer base. Prof. Christensen has done an excellent job in defining this and also gives several examples - steel mills, disc drive industry, etc.

Recently I was thinking about this and analyzing how we at Mitek are disrupting the banking space. Until recently, consumers did not have a way except to drive up to the ATM to deposit a check or buy a office check scanner. We at Mitek have disrupted this by providing a more convenient way for this job to be done i.e deposit a check into the bank account. As soon as you get a check in the mail, just start your banking app on the smart phone, take a picture and click a button and your check is on its way to your account. It is so much better than holding on to the check, hoping to remember that you will take it with you next time you go out and finally stand in line at the teller or the ATM.

The banking space has rarely changed for a long time. The focus in the banking space has been on higher margin services. Mitek has brought in a disruption to the space by providing convenience. Chase was one of the first to adopt Mitek's technology and now most banks are on their way to implement this.

This is becoming ubiquitous with all banking apps and soon you will never have to go to the bank to deposit a check.

In my next blog, I will write about another disruptive technology I had worked on. Stay tuned.