Exploring the Possibilities of the Platform Revolution for Banks and Financial Institutions

The Fourth Industrial Revolution is causing major transformation, particularly in the form of the platform economy. Many leading companies like Apple,Microsoft, Airbnb, and Uber use platforms, and the model is spreading to more and more industries, including healthcare, education, energy, and government. In the book "Platform Revolution," Parker, Van Alstyne, and Choudary argue that any industry significantly dependent on information can be transformed by this platform model. Financial services, especially those that involve credit, depend on information, making them a prime target for the platform revolution. The current trends in the credit market are sparking a revolution that is posing a serious challenge to traditional banking models. As the COVID-19 pandemic is intensifying the need for a major change, banks must leave their comfort zones and start adapting to the market demands in order to remain competitive against the newcomers who are taking advantage of the revolution. The entry of tech powerhouses like Google, Apple, Facebook, Amazon, and Alibaba into the financial services industry (i.e. Google Pay, Apple Pay, Alipay, Amazon Pay) with the development of fintech, has necessitated banks and financial institutions to progress from just digitizing existing services to redefining their place in the digital economy. To remain vital in consumers' worlds, they must transcend merely digitizing services, and partner in and/or develop new digital financial offerings and services. Accenture highlights the requirement for banks to abandon their conventional roles and become “Living Banks” that supply clients with tailored, customer-centric experiences. By taking full advantage of their natural benefits, which include customer trust, brand recognition, and access to customer data, banks can flourish in the platform economy. The development of "marketplaces" has become increasingly prevalent. The rise of "marketplaces" has been a noticeable trend. As observed by Accenture, marketplaces are key for banks to successfully transition to a digital future. Ecosystems and marketplaces are the perfect locations for banks to satisfy their customers' needs by involving partners and providing end-to-end service. Companies like Amazon and Alibaba have pioneered the use of these digitally-based platforms which allow banks to easily meet the requirements of varied customers by allowing them to compare products and services. Financial institutions must go through several essential steps to ensure prosperity. It is imperative for financial institutions to progress through certain crucial stages in order to guarantee success. Banks, financial institutions, and fintechs that have made a decision to investigate and implement the marketplace model should take note of several critical stages: Formulate a marketplace plan which takes into account customers' needs as well as the aims of the company. Design with the customer in mind: Make sure the marketplace is focused on the customer, giving banks a chance to provide products and services directly to their customers. Choose an e-commerce platform and the required functionalities to ensure that the marketplace vision and the banking infrastructure are in sync. Cooperating and forming partnerships are essential for success. Working together and creating alliances can contribute to achieving outcomes. Collaboration and forging alliances are essential for successful marketplaces. When banks team up with other actors, they can widen their scope, capitalize on synergies, and optimize the user/customer experience. The size of the marketplace depends heavily on the amount and diversity of participants. Banks have the potential to capitalize on a selection of chances. Banks have the ability to take advantage of a variety of opportunities. The Fourth Industrial Revolution presents banks with major chances to create remarkable change. By making the most of data and modern technologies, banks can craft a customized, individualized "market of one" for every customer, which gives them the opportunity to vault themselves into the competition of marketplaces. To succeed in this, however, banks must not only have a platform but also provide value-added services to meet the specific needs of each customer. are the Pope, the president of the United States, and the prime minister of India. Examples of worldwide figures of prominence include the Pope, the President of the United States, and the Prime Minister of India. Leaders in the global arena, such as China's ICBC, Spain's BBVA, and Singapore's DBS, are already making notable progress in this area. The online shopping portal of ICBC, BBVA's trial to give banking services on Amazon, and the assorted marketplace services provided by DBS are just some of the many potential usages of the marketplace model. Unlocking the Potential of Data Reformulating the content of this statement keeps its meaning intact, yet gives the phrasing a different spin. Data is identified as a critical factor that allows businesses to add value to customers/users of a marketplace. Banks can employ data to gain a better comprehension of their customers, customize their experiences, and set up data-backed trust networks. Integration with social networking platforms can increase marketplace abilities, granting precise campaign oversight and opportune chances for cross-selling and upselling. In summary, the data demonstrates that the product has a positive effect on the customer base. In conclusion, the evidence suggests that the product has had a favorable impact on the customer base. As banks commence the process of reconversion, they have two choices: innovate and enhance customer experiences or be left behind by the traditional financial services industry. Doing nothing is becoming more expensive, as the competition to remain on top will take place on platforms where customer ease is prioritized. We have the necessary technology and approaches to perform comprehensive investigations, identify value propositions for customers, and implement a successful marketplace. The platform revolution has arrived, and banks can take advantage of it not only by adapting but by guiding the finance industry into the future.

Source: https://medium.com/@tucuota.online/the-platform-revolution-a-great-opportunity-for-banks-and-financial-institutions-30e760d84921?source=rss------fintech-5