Other parts of this series:
- Financial Services Technology Vision 2017: Technology for People
- Financial Services Technology Vision 2017 Trend 1: AI is the new UI
- Financial Services Technology Vision 2017 Trend 2: Ecosystem power plays
- Financial Services Technology Vision 2017 Trend 3: Workforce marketplace
- Financial Services Technology Vision 2017 Trend 4: Design for humans
- Financial Services Technology Vision 2017 Trend 5: The uncharted
Across industries, enterprises are integrating critical activities with digital platforms and creating complex, multidimensional networks that reach far beyond individual organizations.
So far in this series, I have discussed how financial services institutions have a great opportunity to shape their industries and society with today’s new generation of digital tools. I have also outlined the ways in which banks and insurers are employing tools powered by artificial intelligence (AI) not only to streamline their back-office processes, but also to improve customer interactions.
In this post, I will discuss the significance of digital ecosystems, another key trend we identified in our Technology Vision 2017 Survey of 5,400 business and IT executives, including 589 respondents from the banking industry, and 563 respondents from the insurance industry.
Platforms—the ties that bind
Like businesses in other industries, financial services institutions are integrating their core functions with digital ecosystem platforms. Banking executives in particular—36 percent of bankers versus 31 percent of all survey respondents—believe that adopting a platform-based business model and engaging in ecosystems with digital partners is critical.
Ecosystems of customers are aggregating around several new digital platforms, and businesses are more motivated than ever before to take advantage of these entry points.
- Communication platforms like WeChat and WhatsApp, and AI intermediaries like the Google Assistant, Amazon’s Alexa®, and Apple’s Siri represent distinct ecosystems delivering unprecedented access to customers—and businesses are flocking to them.
These platforms give companies rapid access to customer pools and can drive more sales, improve customer service, and create a better customer experience in the process.
Managing broad-based customer relationships in banking
In our Technology Vision 2017 survey, bankers cited the following top three benefits of participating in digital ecosystems:
- Improved customer satisfaction
- Increased speed and agility in developing solutions
- Access to a new customer base
Bankers are already putting these benefits to use. In our survey, 23 percent of bankers indicated their organization is leading one or more digital ecosystem(s).
- For example, BBVA in Spain is opening up its core platform and services upon which others may build their companies and services which, in turn, will help the bank build new businesses.
Ecosystems blur boundaries in insurance
Leveraging platforms from third parties is not new to insurers, either. For example, carriers and brokers were early to recognize the potential of leveraging Google’s platforms for advertising. Insurers are also joining digital ecosystems in other ways:
- The recently announced global strategic partnership between AXA, Alibaba and Ant Financial Services constitutes such a coming-together of insurance platforms and ecosystems. This partnership is exploring opportunities to distribute AXA’s insurance products through Alibaba’s global ecommerce ecosystem.
- Berlin’s simplesurance has developed software that integrates with online stores’ checkout process to let customers buy insurance for their purchase with a click.
- In the United Kingdom, digital platforms aggregating private insurance account for 60 to 70 percent of new business premiums.
Many carriers also use public, private, or hybrid cloud technology, linking them into ecosystems they can join, and a potential network of partners they can leverage to bring their future strategies to life.
Each platform commitment means easier future engagement with other companies on the platform using the same infrastructure—and more difficult partnerships with those companies that have committed to other platforms.
Essentially, by choosing a cloud platform provider, companies are likely selecting the pool that their future digital partners will come from.
In my next post, I will take a look at how talent marketplaces are replacing the traditional workforce.