Platforms for retail banking could turn rivals into allies
Making a banking strategy out of Amazon's approach to consumers, which marries artificial intelligence, data analytics and even the 'co-opetition' of rivals, could help financial institutions improve service to consumers. 'Platformification' could also turn banks and credit unions into more-agile competitors.
Platform “ecosystems,” once the exclusive domain of key direct-to-consumer players like Amazon and Google, are set to have a significant impact on retail banking institutions.
Banks and credit unions need to create platforms in order to survive. There are two aspects to this necessity.
First, the portfolio of products that these financial institutions are currently providing is not being delivered with sufficient innovation to move into the future. These institutions are recognizing that effective platform strategies are essential to bringing forth strategic agility: the ability to open up new markets, grow, scale and reduce the risks of providing the products. The platform approach allows institutions to respond quickly (and at scale) to meet new consumer wants that may not even exist yet.
Taking the ecosystem approach enables institutions to build strong, multi-channel capabilities and marketplaces that allow institutions to center their attention on serving consumers instead of simply distributing products. This allows them to offer their own services and products, coupled with the ability to be a marketplace for additional products from partners and possibly even competitors.
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