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These days the use of cutting-edge technology tends to be equated with relevance to the modern economy and society. But beware of blind faith in digitalization.
Disrupting a tried-and-tested business model from the inside will not work well if customers prefer the older method. British sub-prime lender Provident Financial, founded in 1880, is a good example of these dangers. After regaining and then doubling its pre2008 share price between 2014 and 2016, Provident stock lost more than 80% of its value after a profits warning this summer.
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John van Kuffeler, |
The warning came as the firm missed loan collections and haemorrhaged clients and staff at its home credit division.
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