Online platforms are hot. In retail, social media, tourism, taxi rides and other markets: online platforms are connecting supply and demand —and often outperforming traditional companies that merely offer products or services. The financial services industry will also be affected by these developments – that’s what Turner’s Antal Ruiter, Dodijn Velema and Thijs Venneman conclude after a study into online platforms. The consultants talked to 40 managers and board members of 25 financial institutions in The Netherlands.
92% of managers of financial institutions believe paltformization is inevitable
From startup to large corporate, from insurance broker to consumer bank to regulatory authorities – online platforms are high on each manager’s agenda. Organisations are looking to join a platform, set up their own platform or transforming into a platform-organisation. A major driving force behind these developments is the fear of Big Techs entering the financial services industry with their powerful platforms. This development is already in full swing in South East Asia.
“We feel like an elephant on the savannah. We’re big and strong now, but with these new developments, we’ve become prey for the poachers in the bush.” – a large insurance company
75% is still deciding on its platform strategy
Despite their ambitions and fears, most of the established institutions are still drawing up their strategies instead of executing them. A major pitfall is what we call ‘market-stall-thinking’. Being a market manager is fundamentally different from running a market stall. A large majority of managers and board members we spoke to acknowledged this. If you don’t accept that online marketplaces are fundamentally different, your efforts are bound to fail. The majority of managers and board members at the bigger organizations we spoke to agree that a paradigm shift is necessary.
“We want to be involved in this platform-trend, but it’s hard to go beyond a couple of experiments and participations.” – a large bank
10 recommendations for executing your platform strategy
The study also provides a insights into how a platform organisation works. The consultants also share different strategies financial services companies can follow when it comes to dwaling with platformization. Also, they provide ten recommendations for executing a platform strategy.