Blue Ocean strategy and the banking industry

Friday, 29 July 2016 00:00 -     - {{hitsCtrl.values.hits}}

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Dr. Ravi Fernando, reputed Blue Ocean strategist, and Executive in Residence at the Social Innovation Centre of INSEAD, addressed a packed audience of bankers on ‘Can Blue Ocean strategy be applied to the banking industry?’ on 16 June at the BOC Auditorium. 

The Continuous Professional Development Committee (CPDC) of the Association of Professional Bankers of Sri Lanka, having felt that proactive measures are needed to counter any disruptions to the industry, organised the lecture for the benefit of in senior management and strategy formulation positions. 

Senarath Bandara, Senior Vice President of APBSL, in welcoming Dr. Ravi Fernando stressed the importance of having a Blue Ocean mindset in the banking industry. 

Dr. Fernando, who possesses a wealth of experience in the Blue Ocean Strategy Concept, stated that his aim is to inculcate a new skills set to the audience that will be of immense use to bankers as well as to those in any other industry. He went on to explain the Blue Ocean mindset and the sustainability mindset and explained the importance and the interconnectivity of both. 

He stated that the banking industry is ripe for disruptions as very little has changed in the industry for many years. Quoting global examples from the hospitality industry (i.e. AirBNB)and from the automotive industry (i.e. Tesla), he warned that the threats could come from the most unexpected source as the industries currently outside the banking sector are seeking opportunities in the banking industry. 

He shared in-depth perspectives of the difference between Red Ocean and Blue Ocean strategies, identifying the difference between competing in existing market spaces, and creating uncontested market spaces, thereby making competition irrelevant. 

He went on to explain the importance of the triple bottom line concept, quoting alarming examples from the water crisis, and the new concept of environmental migration. By creating a responsible marketplace for lending, he stressed that the banks can play a massive role in promoting sustainability. 

The Blue Ocean strategy that was developed by W. Chan Kim and Renee Mauborgne, following extensive, decade-long study of more than 150 strategic moves spanning more than 30 industries over 100 years, has been effectively adopted by countries like Malaysia, Singapore and South Korea. Dr Ravi Fernando stated that it is time for Sri Lankan industries to use the Blue Ocean Strategy. 

He posed the question to the audience: “Are you going to be the tenth player in the market or are you going to be the first in the market?”

“If the answer is you are not the first, then go and motivate your team to come up with blue ocean strategies,” he concluded.