The platform era is here, and banks need to adapt or risk being left behind. Platforms are business models that enable ongoing customer relationships and value creation through data and technology. Platforms offer unique growth opportunities for banks, as they can leverage their customer base, data assets, and brand equity to offer more relevant and personalized financial services. However, platforms also require a different strategic mindset and skillset than traditional product-line approaches. To succeed in the platform era, banks need a growth strategy playbook that guides them on how to design, build, and scale their platforms.
A platform is a business model that connects users, producers, and partners in a network, and facilitates value exchange among them. Platforms create value by enabling interactions, transactions, and feedback loops among the network participants, and by harnessing data and technology to enhance the user experience and the network effects. Platforms differ from traditional product-line businesses, which create value by producing and selling standardized goods and services to customers.
Platforms matter for banks because they offer a new way of creating and capturing value in the financial sector. Platforms allow banks to:
- Engage customers throughout their financial journeys, not just at the point of sale, and offer them more tailored and timely financial solutions.
- Expand their offerings and reach by integrating with other platforms and partners, and by leveraging their data and analytics capabilities.
- Enhance their competitiveness and profitability by reducing their costs and risks, and by increasing their customer loyalty and retention.
What are the key elements of a platform growth strategy playbook for banks?
A platform growth strategy playbook is a set of principles and practices that help banks design, build, and scale their platforms. The playbook consists of four key elements:
- Platform vision: This is the overarching goal and direction of the platform, which defines the value proposition, the target segments, and the competitive positioning of the platform.
- Platform architecture: This is the technical and organizational structure of the platform, which defines the core components, the interfaces, and the governance of the platform.
- Platform roadmap: This is the action plan and timeline of the platform, which defines the key milestones, the priorities, and the resources of the platform.
- Platform metrics: This is the measurement and evaluation system of the platform, which defines the key performance indicators, the benchmarks, and the feedback mechanisms of the platform.
What are the best practices and examples of platform growth strategies for banks?
The best practices and examples of platform growth strategies for banks are based on the following principles:
- Customer-centricity: The platform should focus on solving the customer problems and needs, and deliver superior customer value and experience.
- Modularity: The platform should consist of modular and interoperable components, which can be easily added, removed, or modified, to enable flexibility and agility.
- Openness: The platform should allow and encourage external participation and collaboration, from other platforms, partners, and third parties, to create network effects and synergies.
- Innovation: The platform should leverage data and technology, such as artificial intelligence, cloud computing, and blockchain, to create new and improved products and services, and to optimize the platform operations and performance.
Some examples of banks that have adopted platform growth strategies are:
- BBVA: The Spanish bank has transformed itself into a global digital platform, which offers a range of financial and non-financial services, such as banking, payments, insurance, e-commerce, and education, to its customers and partners. BBVA has also invested in and partnered with other platforms, such as Atom Bank, SolarisBank, and Uber, to expand its offerings and reach.
- DBS: The Singaporean bank has developed a platform ecosystem, which connects its customers, employees, and partners, and offers them various financial and lifestyle services, such as banking, wealth management, travel, health, and entertainment. DBS has also leveraged data and technology, such as artificial intelligence, cloud computing, and biometrics, to enhance its platform capabilities and performance.
- Goldman Sachs: The US bank has launched a digital platform, called Marcus, which offers simple and transparent financial products and services, such as savings, loans, and investments, to its customers. Marcus has also integrated with other platforms and partners, such as Apple, Amazon, and Walmart, to offer its products and services to their customers.