In a fast evolving, digitally enabled marketplace, it is no longer practical nor financially feasible to go at it alone. There is an increasing need for collaboration and cooperation, with a trend to move away from the traditional silo-based approach towards networked ecosystems. However, these partnership models are different to before. Firms are collaborating to facilitate strategic transformation of business models, products and even the dynamics of the markets they operate in.
It all comes back to value creation
Today’s ecosystems are all about value creation through more client-centric networks. These enable participant players to collaborate and innovate with their combined expertise, products and services. ‘In full force’, a good ecosystem’s value will be greater than the sum of its component parts. This gives participating ecosystem partners the ability to deliver more than they ever could individually… to the benefit of their clients.
Subsequently, to drive growth, businesses need to consider their options on ecosystem strategy to connect to their customers and markets. This strategy will most likely consider connection with multiple ecosystems rather than a single entity, and carefully weigh up their role in each. Aligned to business vision and ambitions, the goal will be to collectively leverage the strengths and specialisations of each ecosystem participant to meet their clients and target market needs.
Financial Services & retail sector
Within the Financial Services sector, we have seen traditional firms and business models squeezed by newer “disruptor” entrants. These disruptors provide an enhanced and highly personalised customer experience.
And in the retail sector, traditional banks are faced with a market that is increasingly expecting more than just the processing of financial transactions. These markets are moving to a model that more completely support lifestyle events such as: buying a house, starting a family, starting a business, planning a holiday, getting divorced, or losing a job.
What’s the best transition strategy?
Another challenge here is adopting the best transition strategy to this new model, while keeping the existing customers reliably serviced.
In Europe, the PSD2 directive has opened the field further through mandating access to customer and payments related data. Moving towards more open banking, clearing the path for more innovative solutions and a more disintermediated market. However, this still requires a seed-change within the customer mindset on security of data, as trust still mainly lies with the more established, mainstream Financial Services firms… for now.
Looking at the corporate landscape, we already see the adoption of cross functional platforms to handle payments, capital/liquidity positions and management of currency risk, as an alternative to the bank’s proprietary digital channels. While some parts of the corporate sector are less likely to be open to this development, there is still a discernible shift in the market towards a more open and interconnected corporate ecosystems.
What about the buy-side firms?
In the investment management space, ‘buy-side’ firms are also facing challenges. They must balance the growth in opportunities to generate revenue against the inherent cost and complexity of meeting regulatory requirements. Some of this is driving functions out of in-house as well as ignite a renewed focus on customer relationship management with leverage of core skills and competences. In this environment, service partners and custodial players are creating complimentary services to meet these new demands, forming a client servicing ecosystem.
Our ecosystem for change
Projective is also part of such an ecosystem, participating alongside a strong unique portfolio of leading-edge partners. This has created collective access to progressive and innovative skills and tools, enabled aligned collaboration with market players, and gained access to potential capital investment to support: design, prototyping, implementation and the continual iteration of innovative solutions. This has also facilitated the compression of the development cycle, bringing outcomes in weeks and months, rather than years.
Want to know more on our ecosystem and its partners? Connect and ask all your questions or visit our ecosytem web page.